Opinion
No. UWY-CV-08-5011437S
December 15, 2010
MEMORANDUM OF DECISION
I PROCEDURAL BACKGROUND
The parties in this action are the plaintiff, EM Custom Homes, LLC (EM Custom Homes) and the defendants, Alberto Negron, Luz Maria Negron (Luz Negron) and MERS as Nominee for Provident Funding Associates, L.P. On October 14, 2008, the plaintiff filed a two-count complaint against the defendants alleging breach of contract and mechanic's lien foreclosure. In January 2009, the defendants Alberto and Luz Negron (the Negrons) filed an answer and counterclaim to the complaint. On December 11, 2009, the defendants Negrons filed an amended counterclaim which asserted claims under the New Home Contractor's Act, General Statutes § 20-417c, and alleged a per se violation of General Statutes § 42-110b(a). On August 23, 2010, the plaintiff withdrew the Second Count of its complaint, which alleged a claim for breach of contract. On August 23, 2010, the Negrons filed an amended prayer for relief for their counterclaim.
Trial was conducted in this matter over four days from August 18 to August 24, 2010. On September 10, 2010, October 12, 2010, and October 15, 2010, the parties filed post-trial briefs in support of their respective claims and in opposition to the claims asserted against them.
II THE EVIDENCE
At trial, the plaintiff presented evidence that it was a registered New Home Construction Contractor holding registration number NHC 10059. Ed Thomas, a principal of the plaintiff EM Custom Homes, testified that EM Custom Homes and the Negrons entered into two contracts (1) for the purchase of an unimproved lot for $69,900 for property located at Lot 16, 27 Red Maple Lane, Waterbury, Connecticut (27 Red Maple Lane); and (2) for the construction of a single-family residence for a purchase price of $230,000 (New Dwelling Construction Contract). (Trial Ex. 15.) Upon the execution of the lot agreement, the Negrons gave the plaintiff EM Custom Homes a $6000 deposit. In the New Dwelling Construction Contract, the payment schedule set forth that it was "to be determined by buyer's bank depending on loan commitment for construction mortgage." Id.
The New Dwelling Construction Contract was executed by the Negrons on September 26, 2006 and the plaintiff on October 4, 2006. (Trial Ex. 15.) Paragraph Six of the New Dwelling Construction Contract, titled "Completion of Dwelling; no escrow," set forth that "the house shall be available to the Buyer on the date set for the closing, subject to delays caused by weather conditions, contractors or subcontractor's strikes or other labor disputes affecting either the Seller or the Seller's suppliers of materials or for any reason beyond the Seller's control." ( Id.) Paragraph Three of the New Dwelling Construction Contract, titled "Time of Commencement and Completion," set forth that "the work to be performed under the contract shall be commenced as soon as reasonably practicable after the date of execution of the Agreement, and shall be completed three (3) months from date of commencement, excepting delays caused directly or indirectly by the Owner, or at such later date shall be determined in accordance with the provisions of this agreement." ( Id.) Paragraph Seven of the New Dwelling Construction Contract, titled "Change Orders and Selections," set forth that "no changes to plans and specifications will be made without the written approval of the Buyer and Seller, specifying the cost of said changes in writing." ( Id.) Paragraph 12(d) of the New Dwelling Construction Contract, titled "Seller Agreements," provided that "the Seller shall furnish to buyer a complete and absolute mechanic's lien waiver at the time of closing on forms reasonably acceptable to or supplied by Buyer's legal counsel." Paragraph 12(f) provided that "[t]he Seller at his expense shall deliver to the Buyer at closing an unconditional certificate of occupancy issued by the building inspector of the City of Waterbury in which the property is located pertaining to the subject premises." ( Id.) A document titled "Specifications," was also attached to the New Dwelling Construction Contract and related to allowances to the defendants for cabinets, countertops, flooring, fixtures and appliances in the new home. ( Id.)
The Negrons obtained construction loan financing for the construction of the new dwelling with the assistance of Allied Home Mortgage Corp. Ed Thomas, a principal of EM Custom Homes, was also the manager of Allied Home Mortgage Corp. Allied Home Mortgage Corp., through its employee Helen Mezzanotte, prepared a budget for the construction of the new dwelling. (Trial Ex. 18.) Ed Thomas reviewed and approved this budget on behalf of EM Custom Homes. (Trial Ex. 18, p. 177; Trial Tr. 103-04, 8/25/10; Trial Tr. 14; Trial Tr. 104, 8/25/10.) Construction financing was obtained for the property in the amount of $256,600 from Owner Builder Loan Services.
The Negrons executed a construction loan agreement, which agreement provided for draws to be made in five separate stages of construction. (Trial Ex. 18.) The construction loan agreement set forth and detailed what work was to be performed in each stage in order for a draw to be issued. Before the release of draws, various requirements had to be met, including the execution of a Contractor's Affidavit for that stage of work. ( Id.) Owner Builder Loan Services, the lending institution, prepared the Contractor's Affidavit and directed how the affidavit was to be executed and returned to the lending institution. Each stage of construction had a specific budget. The budget for Stage One of the construction was $41,650; Stage Two was $66,150; Stage Three was $13,200; Stage Four was $13,200; and Stage Five was $45,428.00. ( Id.) The construction budget also included additional amounts for the lot purchase and associated fees, non-inspectible items, including permits, builder's risk insurance, survey, utilities, and $8,271 was budgeted for miscellaneous expenses.
At some point Stage 5 of the budget for construction of the new dwelling was modified to $45,428 from $41,850.
The closing for the home and lot occurred on March 12, 2007, six months after the contracts were signed. (Trial Ex. 18.) At the closing, EM Custom Homes received $62,150 for the lot out of the $256,600 financing proceeds. Shortly after the closing, EM Custom Homes also received a check for $41,650 for Stage One of construction and a check for $62,152 for Stage Two of construction. (Trial Ex. 18.) At the closing, the parties entered into a subordination agreement in the amount of $7400 relating to the lot sale. At the time of the March 12, 2007, closing, the house was nowhere near completion.
This $7,400 debt was eventually discharged in bankruptcy prior to trial, and at trial plaintiffs' counsel asserted that the plaintiff was not claiming the defendants had any liability for that amount. (Trial Tr. 23, 8/20/10.)
On August 22, 2007, the defendant Alberto Negron and Ed Thomas, on behalf of EM Custom Homes, executed a Contractor's Affidavit. In the Contractor's Affidavit Thomas affirmed that "General Contractor, Sub Contractors and Suppliers have been paid in full for all amounts owing to it for work performed and materials supplied and for all Laborers who have performed work on the Project under the Construction Project for Stages (circle all that apply) 1, 2, 3, 4." (Trial Ex. 27.) Stages 1, 2, 3 and 4 were circled on the Contractor's Affidavit and Thomas signed the affidavit thereafter. The day after the execution of the Contractor's Affidavit, EM Custom Homes received a check in the amount of $26,000 for Stages Three and Four of construction. At trial, however, Ed Thomas testified that even though he signed the Contractor's Affidavit, he was asserting claims on behalf of EM Custom Homes for materials and work performed in stages of construction that preceded Stage Five.
Paragraph (f) of the Contractor's Affidavit also provided that "[i]f any other demand is made or litigation commenced against Lender or Owner that relates in any way to the matter set forth in this Affidavit, the General Contractor hereby covenants to bear sole responsibility or all costs and expenses incurred by the Lender and/or Owner in relating to such demand or in such litigation. Such costs and expenses specifically include, but are not limited to, all costs and expenses of legal counsel retained by Lender and/or Owner."
The total budget for Stage Five of construction was $45,428. (Trial Ex. 18, p. 272-73.) As of October 2007, an additional $19,425 had been paid to EM Custom Homes for Stage Five construction work. In addition, the Negrons, with the consent of Thomas, were reimbursed $12,278 for the fixtures, countertops and cabinets they had purchased for the bathroom and kitchen. (Trial Ex. 18.) The construction budget set that amount as a Stage Five expense. (Trial Tr. 149, 8/20/10; Trial Ex. 18, p. 272-73.) Thus, as of October 2007, $31,703 of the $45,428.00 budgeted for Stage Five had been disbursed.
Stage Five of the construction budget included light fixtures, finish plumbing, finish electrical, finish heating/cooling, finish trim materials and labor, cabinets, counter tops, ceramic tile, interior paint, finish flooring/carpeting, finish grading/landscaping and appliances.
The draw inspection report dated October 15, 2007 showed that the work that remained to be done in connection with the construction of the new dwelling was "appliances, finish flooring and carpeting and finish grading and landscaping." (Trial Ex. 24.) Ed Thomas testified at trial that the defendants were purchasing the appliances and that EM Custom Homes did not ever finish the grading and landscaping. At trial, the plaintiff offered evidence that, with respect to the flooring and tiling work to be done at the new dwelling, the net flooring cost was $3,332.70, and the total ceramic floor and wall tile cost was $4,366.15. (Trial Ex. 31.) The plaintiff also submitted a summary of the amount due for plumbing fixtures, including a net figure due of $4,575.57. (Trial Ex. 34.)
Thomas also testified at trial that he had paid a $2,024 fee for a well/water connection on September 4, 2007 to the city of Waterbury and contended that he was entitled to be reimbursed for that fee. (Trial Tr. 36, 8/25/10; Trial Ex. BB.) Thomas first testified at trial that in his opinion this fee was incurred "early in — as early as possible in construction" in Stage One of construction. (Trial Tr. 36-37, 8/25/10.) He later changed his testimony and testified that this check to the city of Waterbury was for a water meter which was a Stage Five expense. (Trial Tr. 88, 8/25/10.) Thomas offered no evidence at trial, other than his testimony, to establish there were two checks made out to the City of Waterbury — one for a well/connection fee in Stage One and one for a water meter for Stage Five. The court did not find Thomas' testimony to be credible.
The record reflected that Thomas had been paid $2,800 in construction loan financing proceeds in Stage One for a well/water connection. (Trial Tr. 105-06, 8/25/10; Trial Ex. 18, p. 272.)
Robert Hoyt, a plumber, testified for the plaintiff that he did the plumbing work at the house and installed a tankless hot water heater on December 4, 2007. (Trial Tr. 97-98, 8/20/10.) He testified that this was the second tankless hot water heater installed because the first one was defective. (Trial Tr. 98, 8/20/10.) Hoyt also testified that he installed the tub at the house, but it was not working right. (Trial Tr. 103-04, 8/20/10.) He also testified that he installed the gas fireplace, but denied any knowledge that it was installed upside down. (Trial Tr. 104, 8/20/10.)
John Chabot, a heating and air conditioning specialist, testified for the plaintiff. He testified that he did work at 27 Red Maple Lane on the air conditioning units. He testified that he set the condenser pad, put the condensers in and evacuated and left it because it was too cold to charge the system and get the right charge of refrigeration. (Trial Tr. 112, 8/20/10.) He testified that the air conditioning condenser coil was not energized and estimated that doing so would take four hours of labor and approximately $30-$40 in refrigerant cost. (Trial Tr. 113, 8/20/10.) Chabot testified that when he finished his work at the house, the air conditioning system was not operable. (Trial Tr. 116, 8/20/10.)
Alberto Negron testified that he and Luz Negron moved into 27 Red Maple Lane before a final certificate of occupancy had issued and almost three years after they had first began dealing with EM Custom Homes regarding the construction of the house. (Trial Tr. 168, 8/20/10.) Alberto Negron testified that he was not certain how he and Luz Negron received notice that the house had failed the city of Waterbury building inspection, but that he believed that the defendant Luz Negron received a copy of the list from the inspector's office in City Hall. (Trial Tr. 174-75, 8/20/10.) Alberto Negron testified that he himself went in and did most of the things that needed to be done to get the certificate of occupancy, which included bolting the lolly columns in the basement, fixing the garage kitchen door and putting vents on all the ceilings of the house. Id. With respect to other defects at the house cited by the building inspector, including the lack of a handrail on the stairs and the lack of deck supports, Alberto Negron testified that he was not able to address these issues.
At trial, a video was shown of the condition of the house that EM Custom Homes had built. The video showed footage from the outside of the house, the deck, the stairs, the interior entry hallway, the bathrooms, the kitchen and the basement. The video first showed the outside of the house. The video depicted mounds of dirt and rocks in the back yard and water flowing against the house. The video of the outside deck depicted the separation of the concrete pier support under the deck by approximately five or six inches from the deck. The video also depicted that parts of the exterior siding were warped and either inferior paint or a lack of paint on the front door and front porch area.
The video of the entry hall depicted waves in the sheet rock; a lack of stain and finish on the staircase in the front entry hall; a separation between the staircase in the entry hall and the wall; and a small access panel door near the ceiling of the entry hall which housed the jacuzzi motor. The video continued with shots on the different colored wood floor boards, visible taping lines from where the sheetrock was installed throughout the house and the tile job done in the bathrooms. This video of the tile job depicted images of large gaps left by switch plates, and edges where metal corner pieces were installed. The video of the kitchen area depicted that the cabinetry hung in the kitchen left no room for anything usable under the corner cabinet and that the size of the refrigerator the defendants had in the kitchen was reasonable and not overly large. The video continued with shots on the crooked laundry and garage doors, large gaps showing in the trim work for the moldings in the kitchen and the ceiling area where the leaking shower and tub had leaked into the kitchen. (Trial Tr. 111-67, 8/25/10; Trial Ex. CC.)
At trial plaintiff's expert, Walter Kloss, a real estate appraiser, conceded there were repairs that need to be done at the house as a result of the plaintiff's actions and offered his opinion as to such repairs. He testified that with the assistance of the Negrons he had identified areas of concern that were the focal point of his investigation. (Trial Tr. 65, 8/20/10.) He testified that the staircase from the entry hallway to the second floor, including the railings, had never been stained or sealed, and that deficiency needed to be addressed. (Trial Tr. 66, 8/20/10.) He testified that he received an estimate for this work of $695. He next identified the toilet in the second floor bathroom as a deficiency because it was placed in a location where the bifold doors to the shower could not function properly because the left door hit the toilet when opened. (Trial Tr. 68, 8/20/10.) Kloss identified two possible ways to address this problem, the first was the relocation of the toilet. The second, which he adopted, was the replacement of the toilet with a low profile toilet that would sit below the door so that door could swing open. Id. The estimate Kloss obtained for the low profile toilet was $340.
Kloss further testified that the door for the motor for the jacuzzi tub in a second bedroom was not installed properly in that the door for the motor side was placed at the top of the entry hallway of the house instead of the closet in the bedroom. (Trial Tr. 77, 8/20/10.) Kloss testified, "now in the foyer you have this little door halfway up the wall. My suggestion was a nice large picture to dress up the foyer and hide it . . . What can you do about it now. When somebody was installing the tub, they should have thought, you know, can we get this tub with the motor on the other side. But it's there now the way it is. And actually it's in a good spot for a nice large picture going up the stairway." (Trial Tr. 77, 8/20/10.)
The next deficiency Kloss identified was the depression to the rear of the house near the fireplace and to the rear of the deck. (Trial Tr. 68-69, 8/20/10.) He testified that the ponding in the depression area was causing water seepage into the basement. Id. He also testified that the whole area should have been filled in and pitched away from the house, so any water that came down off the rear embankment and over the ledge would then be pitched to the sides of the house and regained its natural flow toward the street. (Trial Tr. 69, 8/20/10.) He testified that this area needs fill, topsoil and seed. His estimate for seed, hay, and stabilization of this area was $3,500. (Trial Tr. 69-70, 8/20/10.) Kloss further testified that he observed blistering of the vinyl siding on the side of the house, but was not able to ascertain the cost of the defect. (Trial Tr. 70, 8/20/10.) Kloss also testified that he had seen this condition occur with siding when the siding was nailed too tight. (Trial Tr. 75, 8/20/10.) He testified that the condition of the siding looked like it had been exposed to some heat source, but didn't see any visible sources of heat. (Trial Tr. 80, 8/20/10.) When plaintiff's counsel suggested the possibility that the house was struck by lightning, Kloss half-heartedly agreed that this was a possibility, but that he had never seen that scenario before. Id. Kloss testified that the area impacted by the blistering was six feet high by ten to fifteen feet long and he estimated a cost of between $500 and $600 to fix the siding problem.
Kloss also testified that the trim on the laundry room door was "out of plumb" and that someone would have to take off the trim, straighten it out or otherwise "someone would walk into the house and say what's wrong with this house, everything's crooked." (Trial Tr. 71, 8/20/10.) He gave no estimate for fixing this issue. Kloss also conceded that there were a couple of spots in the house that taping needed to be "touched up." (Trial Tr. 78, 8/20/10.)
Kloss also testified that there were issues with the tiling in certain bathrooms in the house. He testified that when someone did the tiling "they stopped the tiling about a half inch above the faceplate to all your sockets — all your switches and outlets are . . . instead of taking and cutting a piece of tile to put in at the top of the faceplate they just did nothing. So you look at it and you have a hole." (Trial Tr. 71, 8/20/10.) He testified that there were several of these throughout the house. Id. Kloss further testified that when the "tile guy" did the corners in the master bathroom, he put metal corners on the tiling instead of using ceramic tile corners which looked "tacky" so "somebody needs to fix that." (Trial Tr. 72, 8/20/10.) He testified that the tile in the master bathroom shower had the same issues where it was not properly installed and it "needs to be pulled up and just replaced, regrouted, replaced." Id. Kloss estimated that six feet of tile would need to be replaced in the shower. (Trial Tr. 83, 8/20/10.)
Kloss next testified that the cabinets in the kitchen were not hung high enough. (Trial Tr. 72, 8/20/10.) He blamed the cabinet problems on the size of refrigerator the defendant Negron chose. ( Id.) He testified that the defendants were not able to access the cabinet above the refrigerator because of the refrigerator's height. His recommendation was to buy a smaller refrigerator or rehang the cabinets. (Trial Tr. 72, 8/20/10.) He also testified that whoever hung the cabinets decided to make the top of the cabinets level and by doing so made the corner cabinet hang so low that nothing could be put underneath it. (Trial Tr. 73, 8/20/10.) Kloss testified that instead of making the top of the cabinet look even by raising the cabinet up and putting fake faceplate along the top, the installer decided to make the top look even by hanging the cabinets that way. Id.
Kloss finally testified that there was a spot under the rear deck where one of the supports needs a "two inch piece, a four by four or two by six, or two by eight or two by whatever you have kicking around, shimmed between the concrete and the deck support to give it a little more stability." (Trial Tr. 73, 8/20/10.)
Kloss testified that his recommended repairs were "little items" that could be done by some handyman. He assigned a value of approximately $2,500 for these items. (Trial Tr. 74, 8/20/10.) Kloss testified that he derived the $2,500 by guessing what a potential buyer would diminish the value of the property due to the need for these repairs. (Trial Tr. 84, 8/20/10.) He also testified that the sum of his total estimated repair costs was $7,035. Id.
Joseph D'Averso testified as an expert witness for the defendants as to the requisite repairs needed at 27 Red Maple Lane. He testified that he was a general contractor with forty years of experience in the remodeling business. He testified that he inspected the property and that upon entering the entry hall there was warped wavy sheetrock with broken seams all the way up to the ceiling and a banister up the stairs that looked like it was not brand new and needed to be refinished. (Trial Tr. 208, 8/20/10.) He testified that he was surprised when he entered the house because it was in a new development and it was new construction. Id. He estimated that it would cost $1,500 to repair the sheetrock and retape the seams. (Trial Tr. 209, 8/20/10; Trial Ex. G.) D'Averso testified that the staircase would need to be refinished and sanded at an estimated cost of $850. (Trial Tr. 210, 8/20/10; Trial Ex. G.) He also testified that the cabinets in the kitchen would need to be raised at an estimated cost of $1,600. (Trial Tr. 211, 8/20/10; Trial Ex. G.) D'Averso further testified that the tile under the refrigerator and cabinets would need to be repaired at an estimated cost of $650 and that the kitchen ceiling would need to be repaired at an estimated cost of $550. (Trial Ex. G.) He testified that in two bathrooms the toilets would need to be relocated, tile and trim repaired and estimated that cost to be $2,600. (Trial Tr. 213, 8/20/10; Trial Ex. G.)
D'Averso also testified as to the exterior work that needed to be done to fix the yard. He recommended bringing in fill, adding drainage, clearing rock, and doing general basic landscaping at an estimated cost of $21,900. (Trial Tr. 214, 8/20/10; Trial Ex. G.) He broke this estimate out into three categories: (1) $2,500 to level and remove debris; (2) $14,000 to install drains on foundation corners and catch basins to storm sewer drains; and (3) $5,400 for forty yards of top soil and grass seed. (Trial Ex. G.) He testified as to the work that needed to be done to fix the back deck and testified that the sonotubes in the center of the deck that would support the weight of the deck were not touching the floor joists of the deck. (Trial Tr. 215-16, 8/20/10.) He proposed popping off some of the boards of the deck and sinking an additional sonotube next to it. (Trial Tr. 216-17, 8/20/10.) His estimate for this work was $2,275. (Trial Ex. G.) D'Averso also estimated that it would cost $2,050 to repair or replace the railing on the front porch to meet code and to push the cement stairs back to the building to meet code. (Trial Ex. G.) D'Averso's total estimates for the work required was $33,975.
On February 11, 2008, the plaintiff filed a Certificate of Mechanic's Lien with the town clerk of the city of Waterbury, which was recorded on February 13, 2008 on the Waterbury land records. The plaintiff claimed it was owed $70,000 for services allegedly rendered in the development of the premises located at 27 Red Maple Lane. (Trial Ex. 2.) The Certificate of Mechanic's Lien stated that the lien was for services rendered July 1, 2007 through November 16, 2007. Id.
At trial plaintiff testified that the $70,000 figure requested in the Certificate of Mechanic's Lien was derived by combining the $69,900 lot price and $230,000 new home construction contract price and subtracting the $221,777 it had received in payment from the defendants. In arriving at its calculations, the plaintiff did not take into account that under General Statutes § 49-33 a mechanic's lien is for services rendered and materials furnished in the construction, raising, removal or repairs of any building or in the improvement of a lot, not to recover the remaining balance on the purchase price of a lot. The plaintiff also pursued the balance remaining on the lot at trial even though such debt had already been discharged in the Negron's bankruptcy.
Thomas testified at trial that he was a "self-admitted poor record keeper" and that he was stressed during construction of the defendants' home. (Trial Tr. 14-15, 8/20/10.) The Negrons testified and Thomas conceded that they had requested an accounting of the expenses of the project in January 2008. Thomas testified at trial that in January 2008 he had requested $40,000 from the Negrons, but did not provide an accounting to them for the expenses incurred. (Trial Tr. 16-17, 8/20/10.)
Thomas testified at trial that "at the time . . . I thought everything was fine up until the end." (Trial Tr. 221, 8/25/10.) Thomas also testified that he inspected the interior and exterior of the house and claimed the "painter would not paint like that," the cracks were not there, his tile workers were not responsible for the metal pieces on the tile, the gaps in the molding were fine, he wasn't given the chance to stain or sand the interior staircase, and there were no drainage issues around the house. (Trial Tr. 234-37, 8/25/10.) Ed Thomas testified that in his opinion the house looked good and the Negrons should have paid in full.
To say this brand new house constructed by EM Custom Homes was a travesty is an understatement.
III DISCUSSION A. Mechanic's Lien Foreclosure Claim
The plaintiff EM Custom Homes moves for judgment on the mechanic's lien it filed on February 16, 2008, with respect to services rendered in the development of 27 Red Maple Lane. The plaintiff claims a lien in the amount of $70,000 for services rendered from July 1, 2007, through November 16, 2007. The lien was dated February 11, 2008, and filed on February 13, 2008. The Certificate of Mechanic's Lien was executed by Ed Thomas, who averred he was a member of EM Custom Homes, LLC. The court finds the lien was timely filed within ninety days of the completion of work at the house.
In its revised complaint dated August 16, 2010, the plaintiff alleged that it was a registered New Home Construction Contractor and that it furnished materials and rendered labor in the construction and improvement of 27 Red Maple Lane. The plaintiff also alleged that it provided these materials and services under an agreement with the Negrons and that it commenced work on or about July 1, 2007, and completed its work on November 16, 2007. The plaintiff further alleged that it filed a Certificate of Mechanic's Lien with the city of Waterbury and that the sum due to the plaintiff for said labor and materials under the lien remains unpaid. During the course of trial the plaintiff sought permission to amend its complaint further to set forth that it completed work on December 4, 2007.
The Negrons first claim that this court should enter judgment in their favor as the plaintiff was not entitled to file a mechanic's lien on the subject property because of Paragraph 12(d) of the New Construction Dwelling Contract between the parties whereby the plaintiff agreed to provide to the Negrons "a complete and absolute mechanic's lien waiver at the time of closing." The Negrons claim that this paragraph prohibits the plaintiff from filing and enforcing its mechanic's lien.
In Capp Industries, Inc. v. Schoenberg, 104 Conn.App. 101, 112, 932 A.2d 453, cert. denied, 284 Conn. 941, 937 A.2d 696 (2007), the court was also faced with the issue of determining the applicability of an absolute mechanic's lien waiver. In that case the parties had signed an initial waiver that seemingly waived the plaintiff's right to file a mechanic's lien. However, as work was being completed, the parties subsequently signed nine subsequent waivers with more restrictive and situational language. The Appellate Court concluded that it was "unclear from the ten waivers whether the parties intended for each to constitute separate and distinct waivers as to specific work, as the court found, or whether they were intended, either separately or conjunctively, to waive [the plaintiff's] rights with respect to all of the work performed on the property." Id., 114. The Appellate Court upheld the trial court's determination that the "waivers were intended to cover the portions of work for which they had received payment, rather than all of the work performed as of that time." Id.
In the present case, the court has before it a general mechanic's lien waiver and a subsequent specific lien waiver, called a Contractor's Affidavit, relating to work done at 27 Red Maple Lane. The court finds that it was the intention of the parties to have the subsequent Contractor's Affidavit waiver cover the specific stages of work for which the plaintiff had performed and completed and that the lien waiver contained in the New Construction Dwelling Contract was not intended to waive the plaintiff's rights with respect to all of the work performed on the property. Accordingly, the Negrons' request that judgment enter in its favor on plaintiff's mechanic's lien on Paragraph 12(d) of the New Construction Dwelling Contract is denied.
General Statute § 49-33(a) provides, in relevant part: "If any person has a claim for more than ten dollars for materials furnished or services rendered in the construction, raising, removal or repairs of any building or any of its appurtenance . . . and the claim is by virtue of an agreement with or by consent of the owner of the land . . . or of some person having authority from or rightfully acting for the owner in procuring the labor or materials, the building, with the land on which it stands . . . is subject to the payment of the claim."
"In this state, a mechanic's lien is a creature of statute and gives a right of action which did not exist at common law . . . The purpose of the mechanic's lien is to give one who furnishes materials or services the security of the building and land for the payment of his claim by making such claim a lien thereon . . . Moreover, [t]he guidelines for interpreting mechanic's lien legislation are . . . well established . . . its provisions should be liberally construed in order to implement its remedial purpose of furnishing security for one who provides services and materials . . . Our interpretation, however, may not depart from reasonable compliance with the specific terms of the statute under the guise of a liberal construction . . . The interpretation of the language of § 49-33 is an issue of law . . . [which is] subject to de novo review." (Citation omitted; internal quotation marks omitted.) Intercity Development, LLC v. Andrade, 286 Conn. 177, 183-84, 942 A.2d 1028 (2008).
"[General Statute § 49-33] is designed to furnish security for a contractor's labor and materials and, as this court has noted previously, is remedial in nature . . . the statute was not intended to provide a security interest for a builder's expectation of profit or other contract measure of damages." Id., 184-85. (Internal quotation marks omitted.) The Supreme Court in Intercity cited to Brin v. Mestite, 89 Conn. 107, 110, 93 A. 4 (1915), which stated that the predecessor to General Statute § 49-33 [General Statutes § 4135] secured the plaintiff's claim for materials furnished and services rendered in the construction of the building, but it did not "afford him security for his loss of profit or damage suffered by his being prevented from completing the work." (Internal quotation marks omitted.) Intercity Development, LLC v. Andrade, supra, 286 Conn. 185.
In Intercity, the plaintiff relied upon the construction contract to calculate the lien amount and alleged an unpaid balance due under the contract after deducting payments made. In the present case, the plaintiff is relying upon the contract price to calculate the lien amount and. has deducted the payments made by the plaintiffs to reach the $70,000 it claims is secured by the mechanic's lien. In Intercity, the testimony at trial was that the $161,117 dollar amount claimed in the mechanic's lien was based on the contract amount and deductions for payments made thereto. In Intercity, the defendant did not challenge the plaintiffs method of calculating the material and services rendered in the lien amount in any way. Intercity Development, LLC v. Andrade, supra, 286 Conn. 187. In the present case, the Negrons challenged the plaintiff's methodology repeatedly. The Negrons argued that the mechanic's lien calculation should be based solely on the costs associated with Stage Five of the construction, and due to the contractor's affidavit signed by Ed Thomas affirming that the four previous stages of construction had been fully paid for, stages one through four should not be included in the calculation. The court agrees with the Negrons' argument as to calculation of amounts owed for labor and materials.
In the present case, the plaintiff originally claimed at trial that its mechanic's lien of $70,000 is the difference between the sum of the lot purchase price of $69,900 and house construction purchase price of $230,000, and the $221,777 paid by the Negrons to the plaintiff. While the actual difference in contract price and payments made is $78,123, the plaintiff only seeks the balance of $70,000 in its mechanic's lien. There are a number of problems with the plaintiff's calculations. First, the Negrons had paid $62,150 towards the lot and $7400 of the lot purchase price had been subordinated to the construction financing on the property. In 2010, the balance owed for the lot was discharged in bankruptcy as was plaintiff's contract claim against the defendants for the purchase of the lot. The balance owed on the lot was $7,750 and the court finds that the plaintiff was not entitled to include this $7,750 as part of its mechanic's lien calculation.
The court notes that the plaintiff has changed the amount due to it under its mechanic's lien multiple times with the amount increasing above $70,000.
The next issue with plaintiff's calculations is that while there may have been a construction contract with a $230,000 purchase price, there was also a construction budget for labor and materials for the same house which the plaintiff signed off on. The plaintiff is seeking to foreclose its mechanic's lien for materials and services provided. The construction budget was laid out for the five stages of construction that the plaintiff affirmed was going to occur. On August 22, 2007, the plaintiff affirmed, through its member Ed Thomas, in a Contractor's Affidavit to the bank providing construction financing that the first four stages of construction were completed. Ed Thomas, however, testified at trial that the first four stages of work were never truly complete, nor fully paid for. Thomas testified that he signed the Contractor's Affidavit and affirmed the work was done and paid for because he wanted to get paid and he knew that this is what the bank required in order for a check to be cut to the plaintiff.
The court found Thomas's testimony regarding the August 22, 2007, Contractor's Affidavit to be disconcerting. If Thomas was to be believed, he lied to the bank about the status of construction and payment of labor and materials for work allegedly completed so that he could receive a significant construction loan advance. In the alternative if Thomas was lying under oath at trial, he lied to the court about the Contractor's Affidavit to get the court to award him additional monetary damages on this same work. The court finds that there was credible evidence presented at trial that the first four stages of construction at 27 Red Maple Lane were completed and fully paid for by August 22, 2007. The court did not find Ed Thomas' testimony to be credible not only this subject, but every other subject at trial.
In its post-trial brief, the plaintiff concedes the following: "[t]he plaintiff may have shown itself to be incompetent in the management of the construction operation; incompetent in the management of its business affairs; or incompetent on the keeping of its business records . . ." (Plaintiff's 10/15/10 Post-trial Brief p. 7). The plaintiff also concedes that from the amount it is seeking for its mechanic's lien, payments, credits and adjustments for allowances and incomplete work should be subtracted. ( Id., 17). The court will do as the plaintiff suggests and deduct from any mechanic's lien amount due, payments made by the defendants, credits and adjustments due to defendants for allowances and incomplete work.
In its post-trial brief the plaintiff concedes that it did not complete certain aspects of work at 27 Red Maple Lane and recites the following as incomplete work: it did not "complete the final grading of the property together with the placement of loam and seed to disturbed areas; painting the front door or the front porch posts; the installation of a hand rail on the left side of the stairs, or the installation of a small block of wood to support the rear deck . . . install an intercom system; install a small strip of asphalt along the driveway; install brick veneer on the front porch or energize the air conditioning compressor." (Plaintiff's 9/10/10 Post-trial brief pp. 24-25.)
The plaintiff then provided estimates as to the cost of fixing or completing this work, which in large part flew in the face of its own expert's testimony at trial as to the cost of repair and completion. For example, at trial Ed Thomas testified that the cost to finish the fill and landscaping was the amount budgeted in the construction contract of $1,900. In its post-trial brief, the plaintiff further reduced this figure to $1,500. The plaintiff's own trial expert, Kloss, however, testified that the cost for this same work was $3,500. The court further notes that in the list of work to be completed or fixed in plaintiff's post-trial brief, it does not refer to staining or refinishing the staircase in the entry hall, fixing the toilet so that the shower door did not hit the toilet, fixing the molding issues around several of the doors in interior of the house, fixing the multiple tile problems in the house, or fixing the improperly hung cabinets in the kitchen. The plaintiff's own trial expert testified that all those areas needed to be fixed. The fact that plaintiff continues to ignore blatant defects in its workmanship is egregious.
Moreover, the plaintiff's summary of monies due to it for overages which it prepared for trial is inaccurate. For example, in the "cabinetry and countertop allowance" summary sheet prepared for trial, it sets forth that the cost incurred for total cabinetry and granite was $13,841.00. The plaintiff then subtracted an $8,000 allowance amount and claimed there was a $5,841 amount due to it for the "overage." (Trial Ex. 33.) What plaintiff didn't put in its "summary" was the fact that Negrons made direct payments for the cabinets and granite in the amount of $12,278.00. The plaintiff agreed to reimburse the defendants for this amount and in fact a check was cut by Owner Builder Loan Services to the Negrons for this reimbursement. (Trial Ex. 18 p. 168.) Thus, the plaintiff never expended $13,841 for countertops and granite as the Negrons had paid $12,278 for these materials and supplies. At best, the plaintiff was owed $1,127 in overages relating to cabinets and countertops.
The same is true with respect to the plaintiff's claimed overage for first floor kitchen and floor and wall tile. In the flooring and tiling summary plaintiff prepared for trial, plaintiff set forth figures of $3,332.70 for flooring and $4,366.15 for tile, totaling $7,698.85. (Trial Ex. 31.) The plaintiff, however, concedes in Trial Exhibit 29, that the Negrons directly paid $7,400 to Atlantic Flooring and they should be credited for that payment. The credit does not appear in the flooring and tile summary. (See Trial Ex. 31.) Thus, deducting the $7,400 payment made by the Negrons for materials, the plaintiff is potentially owed an overage of at best, $298.85, not $3,580.90.
With respect to plaintiff's claimed overage for plumbing fixtures, plaintiff prepared a summary sheet for trial. (Trial Ex. 34.) All of the invoices relied upon by the plaintiff in its summary are from April 2007 and as such are outside the date set forth in the mechanic's lien of July 1, 2007, through November 16, 2007. (Trial Ex. 34.) Based on this fact, the court will not consider any of these invoices or claims relating to these invoices. The Negrons and the plaintiff also offered into evidence additional invoices, totaling $914.27, relating to plumbing work done at 27 Red Maple Lane which were within the relevant mechanic's lien time period. (Trial Exs. O and 45.) The Negrons argue in their post-trial brief that these sums may have been included in the $19,425.00 Stage Five disbursement that the plaintiff EM Custom Homes received in October 2007 and that the plaintiff did not meet its burden in showing these items were not included. However, in Trial Ex. 18, p. 15, it delineates line by line how the $19,425 paid to the plaintiff was calculated and the category "finish plumbing" is not included. Thus, the court finds that the $914.27 incurred by the plaintiff during the relevant mechanic's lien period will be credited to the plaintiff.
Based on the foregoing, the court finds that the overage expenses the plaintiff is entitled to are $1,425.85, not the $17,673.12 claimed at trial and in its post-trial brief and the court further finds that the plaintiff is also entitled to a credit of $914.27 for plumbing materials and supplies.
The plaintiff also claims that if the court goes by the construction budget, then it is entitled to add $15,699 in non-inspectible items to the $41,850 Stage Five construction budget amount. (Plaintiff's 10/15/10 Post-trial brief, p. 16.) The plaintiff contends that this brings the total due to the plaintiff from the construction loan to $57,549.00. ( Id., pp. 16-17.) This analysis is also inaccurate. In the construction budget, the Non-Inspectible Items category had an original budget of $15,699.00. (Trial Ex. 18, p. 11.) That budget however, was later reduced to $12,121.00 of which $5,072 had been paid out for the construction of the house. (Trial Ex. 18, p. 273.) Thus, the total amount the plaintiff could possibly claim was $7,049 not $15,699 as claimed by plaintiff. In addition, in examining what comprised the $7,049 left in this non-inspectible items category $5,149 was for miscellaneous, $950 was for a survey, and $950 was for permits. The plaintiff did not offer any evidence at trial that it expended funds for a survey and is owed this money or that $950 in permit fees were paid and not reimbursed. Moreover, the plaintiff failed to set forth at trial what specific materials and services would be included in this miscellaneous category. Accordingly, the plaintiff's argument that $15,699 should be added to the original Stage Five construction budget amount is without merit.
The court notes that the construction budget for Stage Five of construction was $45,428 in August 2007, not $41,850 as originally budgeted.
As of August 2007, the Stage Five Construction budget was $45,428. (Trial Ex. 18, p. 272-73.) Plaintiff was paid $19,425 for Stage Five work, and it concedes that the defendants Negrons properly received a $12,278 reimbursement for cabinets and countertops. The $12,278 expenditure was a line item in the Stage Five construction budget. It also agrees that a $1,900 credit should be given to the Negrons with respect to appliances budgeted in Stage Five as the plaintiff never expended any funds for appliances. The plaintiff has also conceded that the $1,900 line item budgeted in Stage Five to finish landscaping was never incurred. This leaves a balance of $9,925 the plaintiff could possible claim was owed to it under the construction budget.
The plaintiff, however, has additionally conceded that the Negrons should be credited $1200 for an intercom system that was never installed. The plaintiff has also conceded that the defendants should be credited $200 for plaintiff's failure to charge the air conditioning condenser and $150 for painting the exterior columns and front doors. Thomas testified at trial that he estimated the cost of energizing the compressor at $200. The defendant Alberto Negron also testified at trial that the system need more than energizing as the air conditioner was inoperable and that it cost him $1,044.00 to get the system operating. The defendant Alberto Negron offered into evidence an invoice supporting his claim. (Trial Ex. M.) The court credits the testimony of defendant Alberto Negron as to the condition of the air conditioning unit and expenses incurred. The plaintiff also conceded that it did not finish the brick veneer to the house and owed a credit to defendants of $1,120.00 and that extra asphalt should have been put in the driveway at a cost of $160.00. At trial the Negrons did not offer any counter estimates to the estimates that the plaintiff offered for the painting and veneer. The total of the plaintiff's mechanic's lien after the foregoing deductions is $6,401. Adding in the $1,425 in overages and $914.27 in plumbing expenses, the plaintiff's mechanic's lien totals $8,740.27.
The court also credits the defendants' expert, Joseph D'Averso's, a witness with forty years of experience in the construction business, more than that of plaintiff's expert, Mr. Kloss,' testimony with respect to the work that needed to be done to fix and repair the defective workmanship at the premises. The court credits D'Averso's estimates and testimony as to the following work: $1,500 for foyer repair; $850 to sand and seal stairs and railings; $2,800 to raise cabinets, repair tile under cabinets and island and repair the kitchen ceiling; $2,600 to relocate the two toilets, redo trim, repair the tile in the bathrooms; $2,050 to replace or repair the railing and raise and push back cement stairs to meet code; $2,275 install a proper foundation for deck to meet code, remove deck demo, re-use deck materials or re-install. With respect to the work required for the lot the court credits the $5,400 estimated for forty yards top soil and spread forty yards or fill, and spread or plant grass seed and the $2,500 estimate to level and remove debris on the lot. The court finds that a sufficient evidentiary basis has also been laid for the drainage work requested at an estimated cost of $14,000, which the court finds to be reasonable.
Accordingly, based on the foregoing the court finds that the cost of additional work necessary to finish and repair the premises constructed by the plaintiff is $33,975.00. The court also finds that the $8,740.27 owed to the plaintiff for materials and services during the period of time July 1, 2007, through November 16, 2007, is set off by the $33,975 cost to the Negrons to finish and repair the dwelling at 27 Red Maple Lane. Based on the foregoing, the court finds that the amount the plaintiff is owed on its mechanic's lien is zero and plaintiff in fact owes the Negrons $25,234.73 to finish and repair the premises at 27 Red Maple Lane.
Judgment enters in the defendants' favor on the plaintiff's mechanic's lien count in the complaint.
B. New Home Warranty Act Claim
In their post-trial brief, the Negrons argue that the plaintiff breached the requirements of the New Home Warranty Act, General Statutes § 47-116 and that such violation is a violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110, et seq. (Defendants' Post-trial brief, p. 1). In its reply brief, the plaintiff argues that this is the first time that the Negrons raised a claim pursuant to the New Home Warranty Act and this claim is a material variance from the defendants' December 11, 2009, counterclaim. The plaintiff is correct. In its amended counterclaim dated December 11, 2009, the defendants Negrons asserted a single counterclaim against the plaintiff pursuant to New Home Contractors Act, General Statutes § 20-417, et seq., not the New Home Warranty Act. The court notes that the Negrons have not offered any theory upon which the court should consider this new claim and not their original counterclaim.
"The purpose of [a pleading] is to limit the issues to be decided at the trial of a case and is calculated to prevent surprise . . . It is fundamental in our law that the right of a [party] to recover is limited to the allegations in his [pleading] . . . A [party] may not allege one cause of action and recover upon another." (Citations omitted; internal quotation marks omitted.) Boccanfuso v. Conner, 89 Conn.App. 260, 286-87, 873 A.2d 208, cert. denied, 275 Conn. 905, 882 A.2d 668 (2005).
The court finds that the introduction of a new theory of liability on a different statutory scheme after the close of evidence and trial is highly prejudicial to the plaintiff. The court will not consider the Negrons' arguments in their post-trial brief relating to this claim.
C. New Home Construction Act Claim
The Negrons have asserted a single counterclaim against the plaintiff pursuant to the New Home Construction Act, General Statutes § 20-417c. The Negrons have alleged that the plaintiff violated subsections (4), (6) and (7) of the Act.
General Statutes § 20-417c provides in relevant part: "The commissioner may revoke, suspend, or refuse to issue or renew any certificate issued pursuant to Sections 20-417a to 20-417j, inclusive, or place a registrant on probation or issue a letter of reprimand after notice and hearing in accordance with the provisions of Chapter 54 concerning contested cases if it is shown that the holder of such certificate has: (1) failed to comply with any provision of Sections 20-417a to 20-417j, inclusive, or any regulation adopted pursuant to said sections . . . (4) engaged in any untruthful or misleading advertising . . . (6) engaged in any unfair or deceptive business practice under subsection (a) of Section 42-110b; (7) failed to timely complete any task, as specified in a written contract of sale . . ."
1. General Statutes Section 20-417c(4)
The plaintiff first contends that in order for the plaintiff to be liable under § 20-417c(4), a new home construction contractor may not engage in any untruthful or misleading advertising, the Negrons would have to prove that the plaintiff had promotional literature or advertisements which engaged in untruthful or misleading advertising. The plaintiff argues that the Negrons' claim must fail because the Negrons were introduced to the plaintiff through a broker and none of the broker's advertisements were introduced into evidence.
The Connecticut Supreme Court has defined the word "advertise" as follows: "to announce publicly esp[ecially] by a printed notice or a broadcast; [and] to call public attention to esp[ecially] by emphasizing desirable qualities so as to arouse a desire to buy or patronize." (Internal quotation marks omitted.) QSP, Inc. v. Aetna Casualty Surety Co., 256 Conn. 343, 365, 773 A.2d 906 (2001). Additionally, the court recognized that "Black's Law Dictionary defines advertising in a manner that would include such dissemination of information [as]: [a] oral, written, or graphic statement made by the seller in any manner in connection with the solicitation of business . . ." (Internal quotation marks omitted.) Id. "Courts have differed over precisely what type of conduct constitutes advertising activity. A number of courts have defined the term expansively to include even individual sales pitches to individual consumers; but other courts have defined it more narrowly." (Internal quotation marks omitted.) Id. In certain contexts, "courts . . . have defined [advertising] in terms that include the dissemination of information to promote a product . . . A common theme, however, is the requirement that information must be publicly or widely disseminated in order to be considered advertising." (Internal quotation marks omitted.) Id., 366.
Based on the testimony at trial and exhibits admitted, the court finds that the Negrons did not offer sufficient evidence at trial to prove by a fair preponderance of the evidence that the plaintiff violated § 20-417c(6). In particular, the court finds that the Negrons offered no evidence as to any promotional brochures or other advertising materials that were provided to them or observed by them that induced them to enter into a contract with the plaintiff. Accordingly, judgment enters in the plaintiff's favor with respect to the defendants' claim pursuant to § 20-417c(4).
2. General Statutes Section 20-417c(6)
The plaintiff next argues that judgment should be rendered in its favor on the Negrons' claim pursuant to § 20-417c(6). The plaintiff argues that in order for it to be found liable under this statutory section, the Negrons must plead and prove that the plaintiff engaged in unfair or deceptive business practices under the Connecticut Unfair Trade Practices Act, General Statutes § 42-110b(a) (CUTPA). The plaintiff contends that the Negrons have not alleged any specific conduct which would bring the allegations under this subparagraph other than negligent construction.
CUTPA provides: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes § 42-110b(a). The Connecticut Supreme Court has "adopted the criteria set out in the cigarette rule by the Federal Trade Commission . . . (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise . . . (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers [(competitors or other businessmen.]" Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 591, 657 A.2d 212 (1995). "[A]ll three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three." (Internal quotation marks omitted.) Associated Investment Co. Ltd. Partnership v. Williams Associates IV, 230 Conn. 148, 156, 645 A.2d 505 (1994). "Thus, a violation of CUTPA may be established by showing either an actual deceptive practice . . . or practice amounting to a violation of public policy . . . Furthermore a party need not prove an intent to deceive to prevail under CUTPA." (Citations omitted; internal quotation marks omitted.) Cheshire Mortgage Services, Inc. v. Montes, 223 Conn. 80, 106, 612 A.2d 1130 (1992).
In Associated Investment Co. Ltd. Partnership, the. Connecticut Supreme Court held that our General Assembly in adopting the sweeping language of § 5(a)(1) of the Federal Trade Commission Act "upon which the CUTPA legislation was based, chose not to define the scope of unfair or deceptive acts proscribed by CUTPA so that courts might develop a body of law responsive to the marketplace practices that actually generate such complaints." (Internal quotation marks omitted.) Associated Investment Co., Ltd. Partnership v. Williams Associates IV, supra, 230 Conn. 157. (Internal quotation marks omitted.) "Predictably, [therefore] CUTPA has come to embrace a much broader range of business conduct than does the common law tort action." Id., 157-58. "In addition to establishing a standard of conduct more flexible than traditional common law claims, the expansive language of CUTPA prohibits unfair or deceptive trade practices without requiring proof of intent to deceive, to defraud or to mislead." (Internal quotation marks omitted.) Id., 158.
"[N]ot every contractual breach rises to the level of a CUTPA violation." Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 571, 845 A.2d 417 (2004). In Naples v. Keystone Building Development Corp., 295 Conn. 214, 229, 990 A.2d 326 (2010), the Supreme Court affirmed the trial court's determination that the defendants' unworkmanlike construction of the plaintiff's home did not constitute a CUTPA violation. In making that finding the court stated that the trial court could reasonably have relied on testimony that the general contractor and its subcontractors had attempted multiple times, albeit unsuccessfully, to remedy the damage and problems about which the plaintiff had complained. The court found that "[i]n the absence of aggravating unscrupulous conduct, mere incompetence does not by itself mandate a trial court to find a CUTPA violation." Id.
Conversely in Tessman v. Tiger Lee Construction Co., 228 Conn. 42, 54, 634 A.2d 870 (1993), the Supreme Court upheld a finding of a CUTPA violation where the contractor's actions constituted reckless disregard of the homeowner's rights justifying a punitive damages award. There the contractor "1) represented that it would perform all work with its own employees, but instead relied heavily on subcontractors; (2) refused to try to fix leaks, claiming they were "merely condensation"; 3) told homeowners to set traps to resolve problems of rodents entering through hole in wall; and 4) buried paint cans and other noxious materials . . . in a wetland near [the home's] well." Id., 54-55. See also Centimark Corp. v. Village Manor Associates Ltd Partnership, 113 Conn.App. 509, 523-24, 967 A.2d 550, cert. denied, 292 Conn. 907, 973 A.2d 103 (2009) (upholding finding of CUTPA violation in case arising from faulty roofing work when general contractor represented that work would be done by a "Master Elite" roofing subcontractor, and then failed to inform owner that task would be subcontracted to another, less qualified subcontractor).
In Scrivani v. Vallombroso, 99 Conn.App. 645, 649, 916 A.2d 827, cert. denied, 282 Conn. 904, 920 A.2d 309 (2007), the Appellate Court found that the trial court had properly found CUTPA violations, both per se and under the New Home Improvement Act, General Statutes § 20-417 et seq., based on the contractor's false representations of qualifications with respect to installation of siding, and also his pressuring of the plaintiffs for payment in full before he had completed work so as to preclude them from raising the Home Improvement Act in defense of any suit for payment that he might bring.
In the present case, the court heard multiple days of testimony that the plaintiff, through Thomas, had misrepresented the plaintiff's qualifications and abilities to properly construct a new home. At trial Thomas testified the plaintiff had built very few new homes prior to 27 Red Maple Lane. It is clear from the voluminous evidence received at trial that the plaintiff neither had the expertise nor qualifications to build a home. The plaintiff never offered to nor completed repairs for the multitude of problems in this travesty of a house after its construction. Instead, the plaintiff left the Negrons to finish construction and repair the work done. The court also finds that Thomas' refusal to provide an accounting to the Negrons for expenditures and potential overages was egregious. At trial, Thomas exhibited no remorse for the disaster of a home the plaintiff left for the defendants, nor any concern as to the safety issues that were left at the house. In fact, from testimony at trial it was clear that Thomas thought the plaintiff did a good job constructing this house. This was not incompetence in the running of a business as plaintiff claims. This was the conscious and reckless disregard by the plaintiff for both the condition of this dwelling and for the Negrons' safety.
The plaintiff also argues that the Negrons have not proven an ascertainable loss from the plaintiff's actions. At trial, the Negrons offered expert testimony as to the loss suffered and costs to repair and finish the house and the Negrons also offered into evidence a video of the catastrophic nature of the house. The court credits the testimony of the defendants' expert witness and found him to be credible with respect to the work that needed to be done and cost of such work at the dwelling. The court finds that the Negrons have in fact proven the ascertainable loss they have suffered as a result of the plaintiff's actions.
The court finds that plaintiff has violated § 20-417c(6), which is a per se violation of CUTPA. The court enters judgment in the Negrons' favor on this claim in the amount of $25,234.73, plus attorneys fees and costs.
3. General Statutes Section 20-417c(7)
The Negrons next claim that the plaintiff violated § 20-417c(7) in that the plaintiff failed to timely complete the construction of the house as specified in the written contract of sale. Pursuant to Paragraph Three of the New Dwelling Construction Contract, "the work to be performed under this contract shall be commenced as soon as practicable after the date of the execution of this Agreement, and shall be completed three (3) months from date of commencement, excepting delays caused directly or indirectly by the Owner, or at such later date shall be determined in accordance with the provisions of this Agreement."
The Negrons signed the contract on September 26, 2006 and the plaintiff signed it on October 4, 2006. By the time of the March 2007 closing, work had been commenced and the plaintiff was paid a significant sum of money for this work. There is no dispute, however, that the house was not completed within the three months required under the contract. In fact, six months after the execution of the contract at the closing, the house was no where near completed. The house did not receive a certificate of occupancy until December 31, 2007, fifteen months after execution of the contract.
Paragraph 12(f) of the New Dwelling Construction Contract specifically provided that "[t]he Seller at his expense shall deliver to the Buyer at closing an unconditional certificate of occupancy issued by the building inspector of the city of Waterbury in which the property is located pertaining to the subject premises." This never occurred. In fact, after the dwelling failed the city of Waterbury building inspection on two occasions in November 2007, and the certificate of occupancy was obtained largely through the Negrons' efforts.
The plaintiff nonetheless contends that the Negrons contributed to the delays in construction of the house. Based on the evidence and testimony presented at trial the court disagrees. The court also finds that the delay in finishing the house was due in large part to the plaintiff's inability to construct a house and the diversion of the plaintiff's attention to completing the road in the development in which 27 Maple Road was situated.
Based on the foregoing, the court finds that the plaintiff violated § 20-417c(7) and enters judgment in the Negrons' favor on this claim and awards the defendants $10,000 in damages on this count.
IV CONCLUSION
After having considered the evidence and testimony presented, the court enters judgment as follows: 1) in the Negrons' favor on plaintiff's mechanic's lien claim, 2) in plaintiff's favor on the Negrons' General Statutes § 417c(4) counterclaim; 3) in the Negrons' favor on their General Statutes § 417c(6) counterclaim and the court awards the Negrons damages in the amount of $25,234.73, plus attorneys fees and costs; 4) in the Negrons' favor on their General Statutes § 417c(7) counterclaim and awards the Negrons $10,000 in damages.
A hearing on the Negrons' attorneys fees and costs is scheduled for January 24, 2011. An Affidavit of Attorneys Fees showing the dates legal services were rendered, hourly rate charged and work performed should be filed and served by January 7, 2011.