Burns v. Adler
Opinion
ROGERS, C.J.
The primary issue that we must resolve in this certified appeal is whether the bad faith exception to the bar on the enforcement of home improvement contracts that do not comply with the Home Improvement Act (act), General Statutes § 20-418 et seq., entitled the plaintiff contractor, James E. Burns, Jr., to recover damages from the defendant homeowner, David Y. Adler,
1
for home improvement services despite the plaintiff's noncompliance with that statute. The parties entered into an agreement whereby the plaintiff agreed to furnish materials and supply labor in connection with the renovation of a residence owned by the defendant in the town of Salisbury. After the renovation project was largely complete, a dispute arose regarding amounts that the defendant owed the plaintiff for services performed. Thereafter, the plaintiff brought this action claiming, among other things, breach of contract and unjust enrichment. The defendant raised the special defense that the plaintiff's claims were barred because the agreement did not comply with the requirements
of General Statutes (Rev. to 2007) § 20-429.
2
In turn, the plaintiff claimed that the defendant was precluded from relying on § 20-429 because his refusal to pay the plaintiff was in bad faith. After a trial to the court, the
trial court concluded that the plaintiff had incurred damages in the amount of $214,039 and that § 20-429 did not bar recovery because the defendant's refusal to pay was in bad faith. Accordingly, the court rendered judgment for the plaintiff in the amount of $214,039. The defendant appealed to the Appellate Court, which affirmed the judgment of the trial court. See
Burns
v.
Adler
,
The record reveals the following facts, which are undisputed or were found by the trial court, and procedural history. In September, 2007, the plaintiff, who is a self-employed construction worker, and the defendant entered into negotiations regarding the renovation and remodeling of a weekend residence that the defendant was planning to buy in the town of Salisbury. The work was to include substantial demolition of the existing structure, the addition of a second floor and the expansion of the structure's footprint. The defendant wanted the work to be performed as quickly as possible so that he and his family could use the residence during the summer of 2008. The parties discussed a cost of approximately $400,000.
Pursuant to these discussions, the plaintiff prepared a written "Home Improvement Service Agreement" (agreement) dated October 5, 2007. The agreement described the services that the plaintiff was to perform as "begin demolition [of] existing home in preparation of planned remodel." The agreement also provided that "[a]ny modifications or changes to the above described scope of services shall be set forth in a written [c]hange [o]rder signed by both parties ." (Emphasis in original.) In addition, the agreement provided that the defendant would pay the plaintiff "[$45] per man plus any expenses to include dumpsters [and/or] materials." The agreement further provided that "once full plans have been provided we will start another contract with firm pricing for every aspect of [the] job with the exclusion of any changes as the project progresses." The trial court concluded that the agreement did not satisfy the requirements of § 20-249 (a) or (f) because it was not signed by the plaintiff, it did not contain a completion date and the plaintiff failed to prove that he delivered a completed copy of it to the defendant. 3 From October, 2007 through September, 2008, the plaintiff worked exclusively on the defendant's renovation project. During that period, the plaintiff received numerous work orders related to the project from multiple sources, including the defendant, his wife, Amie R. Weitzman, the defendant's architect, Elizabeth Slotnick, and Weitzman's assistant, Julie Weiner. None of these four people had a complete understanding of the work that the plaintiff was being requested to perform. In addition, none of them ever inquired about the cost of doing the various items of work that they requested. The written plans for the project were frequently revised by the defendant and others acting on his behalf, and many of the changes were significant. Indeed, the trial court found that the "project was marked by untrammeled profligacy on the part of the [defendant]." 4 According to the plaintiff, he continued to rely on the time and materials provision of the agreement and never executed a "contract with firm pricing," as provided by the agreement, because he never received a full set of plans and "things constantly changed from day to day ...."
As the project moved forward, the plaintiff periodically requested payments from the defendant, which the defendant provided. The plaintiff did not send the defendant itemized bills, however, and the defendant initially did not request them. Rather, the plaintiff calculated his expenses from his checkbook records, invoices and time sheets. 5 The plaintiff did not retain all invoices and time sheets relating to the project, nor did he keep a daily construction log or other records that would show which tradesmen were on the site, what work was performed, or what materials were delivered to the site.
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ROGERS, C.J.
The primary issue that we must resolve in this certified appeal is whether the bad faith exception to the bar on the enforcement of home improvement contracts that do not comply with the Home Improvement Act (act), General Statutes § 20-418 et seq., entitled the plaintiff contractor, James E. Burns, Jr., to recover damages from the defendant homeowner, David Y. Adler,
1
for home improvement services despite the plaintiff's noncompliance with that statute. The parties entered into an agreement whereby the plaintiff agreed to furnish materials and supply labor in connection with the renovation of a residence owned by the defendant in the town of Salisbury. After the renovation project was largely complete, a dispute arose regarding amounts that the defendant owed the plaintiff for services performed. Thereafter, the plaintiff brought this action claiming, among other things, breach of contract and unjust enrichment. The defendant raised the special defense that the plaintiff's claims were barred because the agreement did not comply with the requirements
of General Statutes (Rev. to 2007) § 20-429.
2
In turn, the plaintiff claimed that the defendant was precluded from relying on § 20-429 because his refusal to pay the plaintiff was in bad faith. After a trial to the court, the
trial court concluded that the plaintiff had incurred damages in the amount of $214,039 and that § 20-429 did not bar recovery because the defendant's refusal to pay was in bad faith. Accordingly, the court rendered judgment for the plaintiff in the amount of $214,039. The defendant appealed to the Appellate Court, which affirmed the judgment of the trial court. See
Burns
v.
Adler
,
The record reveals the following facts, which are undisputed or were found by the trial court, and procedural history. In September, 2007, the plaintiff, who is a self-employed construction worker, and the defendant entered into negotiations regarding the renovation and remodeling of a weekend residence that the defendant was planning to buy in the town of Salisbury. The work was to include substantial demolition of the existing structure, the addition of a second floor and the expansion of the structure's footprint. The defendant wanted the work to be performed as quickly as possible so that he and his family could use the residence during the summer of 2008. The parties discussed a cost of approximately $400,000.
Pursuant to these discussions, the plaintiff prepared a written "Home Improvement Service Agreement" (agreement) dated October 5, 2007. The agreement described the services that the plaintiff was to perform as "begin demolition [of] existing home in preparation of planned remodel." The agreement also provided that "[a]ny modifications or changes to the above described scope of services shall be set forth in a written [c]hange [o]rder signed by both parties ." (Emphasis in original.) In addition, the agreement provided that the defendant would pay the plaintiff "[$45] per man plus any expenses to include dumpsters [and/or] materials." The agreement further provided that "once full plans have been provided we will start another contract with firm pricing for every aspect of [the] job with the exclusion of any changes as the project progresses." The trial court concluded that the agreement did not satisfy the requirements of § 20-249 (a) or (f) because it was not signed by the plaintiff, it did not contain a completion date and the plaintiff failed to prove that he delivered a completed copy of it to the defendant. 3 From October, 2007 through September, 2008, the plaintiff worked exclusively on the defendant's renovation project. During that period, the plaintiff received numerous work orders related to the project from multiple sources, including the defendant, his wife, Amie R. Weitzman, the defendant's architect, Elizabeth Slotnick, and Weitzman's assistant, Julie Weiner. None of these four people had a complete understanding of the work that the plaintiff was being requested to perform. In addition, none of them ever inquired about the cost of doing the various items of work that they requested. The written plans for the project were frequently revised by the defendant and others acting on his behalf, and many of the changes were significant. Indeed, the trial court found that the "project was marked by untrammeled profligacy on the part of the [defendant]." 4 According to the plaintiff, he continued to rely on the time and materials provision of the agreement and never executed a "contract with firm pricing," as provided by the agreement, because he never received a full set of plans and "things constantly changed from day to day ...."
As the project moved forward, the plaintiff periodically requested payments from the defendant, which the defendant provided. The plaintiff did not send the defendant itemized bills, however, and the defendant initially did not request them. Rather, the plaintiff calculated his expenses from his checkbook records, invoices and time sheets. 5 The plaintiff did not retain all invoices and time sheets relating to the project, nor did he keep a daily construction log or other records that would show which tradesmen were on the site, what work was performed, or what materials were delivered to the site.
On March 15, 2008, the plaintiff presented the defendant with a written budget report showing that the projected total cost of the project was $810,267, including $521,944 for work already completed. On March 25, 2008, the plaintiff presented the defendant with a revised budget report showing that the projected total cost of the project was $795,038, including $518,352 for work already completed. On May 27, 2008, the plaintiff informed the defendant by e-mail that the budget had increased to $886,954, not including certain additional items that the defendant had requested. The e-mail stated that "all future changes will be done on a time and material basis unless it is more efficient to bid," and that "[t]here will ... be a need for an [e-mail] or written response for these changes from either you or your wife's office approving them ...." The plaintiff also told the defendant that he owed substantial amounts to his subcontractors and required additional funding to keep them working. The defendant was unhappy with the revised budget, but he chose to retain the plaintiff as his contractor because he was anxious to have the project completed so that he could use the house. Although the defendant contended that he believed that the e-mail represented the terms of a new "fixed price contract," he and Weitzman continued to ask the plaintiff to perform additional tasks.
On August 25, 2008, the plaintiff sent a letter to the defendant setting forth the "final numbers for all work performed" at the residence. The plaintiff stated that the total cost of the project was $1,188,350 and that payments received to date totaled $985,000, for a balance due of $203,350. 6 At that point, the project was approximately 98 percent complete. In response, the defendant sent an e-mail to the plaintiff on September 3, 2008, summarizing and comparing the various budget reports that the plaintiff had provided. The defendant complained that "the numbers do not add up and there are different categories being created in each budget." According to the defendant's calculations, the total cost of the project was $963,923, or $21,077 less than the $985,000 that the defendant had already paid. The $963,923 figure included extra items of work that the defendant had approved since the plaintiff's May 27, 2008 budget report. The defendant indicated that he was willing to pay for these extras if the plaintiff could establish that the amounts shown were correct, and he requested additional information for certain items. The defendant also noted that the plaintiff had not begun to address "the 100+ item punch list" that the defendant had provided to the plaintiff. Finally, the defendant stated that he had been "very happy with the quality of [the plaintiff's] work generally and it is my hope that we can resolve this matter amicably."
On September 8, 2008, the plaintiff informed the defendant that the total cost of the project had increased to $1,199,911, and the total balance due was $214,911. On September 12, 2008, the plaintiff sent an e-mail to the defendant itemizing in detail the work that he and others had been performing at the residence since June 1, 2008. The plaintiff, however, did not provide the cost of each item or any backup documentation. The plaintiff stated that he had performed the work at the defendant's request on the understanding that he would be paid for it. He also stated that he was losing money on the project, that his relationships with his subcontractors and suppliers were in jeopardy, and that he needed to pay them.
On September 9, 2008, the defendant's architect, Slotnick, sent an e-mail to the defendant indicating that she had received an e-mail from a supplier inquiring whether the defendant was happy with the kitchen cabinetry, because he had not been paid yet. Slotnick had told the supplier that the plaintiff and the defendant had financial issues that they were attempting to resolve. In response, the defendant sent an e-mail to Slotnick asking if she could recommend "a good attorney who does this kind of work."
On September 16, 2008, the defendant informed the plaintiff by e-mail that "[w]e are at the end of the road." The defendant stated that the plaintiff's explanations of the additional charges after the May 27, 2008 budget report "were neither itemized, nor specific, and in my opinion are wholly inadequate ...." Accordingly, the defendant concluded that he did not owe the plaintiff any amount beyond the $985,000 that he had already paid, which included payment for all extra work performed after May 27, 2008, of which the defendant was aware. The defendant also stated that he was going to hire a contractor to complete the punch list items and that he was "officially and immediately terminating [the] relationship." Finally, the defendant stated that, if the plaintiff intended to litigate the matter in court, the defendant, who is an attorney, would represent himself, and he strongly believed that he would prevail. The defendant admitted at trial that the statement that he would represent himself was false and that he made it in the hope that the plaintiff would not bring a lawsuit if he knew that he would incur litigation expenses that the defendant would not incur.
In response to the defendant's September 16, 2008 e-mail, the following day the plaintiff sent an e-mail to the defendant stating, "[I] would like to finish the punch list. It is my respons[i]bility to complete the work." The plaintiff also asked whether his subcontractors would be paid. On September 24, 2008, the defendant sent an e-mail to the plaintiff inquiring when he would be able to complete the punch list. The defendant explained to the plaintiff that, "unless an item is highlighted on the punch list in yellow, these items are included in the amounts I have paid you to date ...." On October 10, 2008, the defendant sent another e-mail to the plaintiff stating that, although the plaintiff had indicated that he wanted to complete the punch list, the defendant had "only seen modest progress ...." Accordingly, the defendant was going to hire a contractor to complete the work. In addition, the defendant stated that, in light of the fact that he had received a notice of the plaintiff's intent to file a mechanic's lien on the residence, the plaintiff was no longer permitted to enter the defendant's premises.
On October 10, 2008, the plaintiff filed a certificate of mechanic's lien in the amount of $214,039.09 on the defendant's property. According to the certificate of mechanic's lien, the "last day substantial services were performed relative to the work done by [the plaintiff] was August 29, 2008."
Thereafter, the plaintiff brought this action against the defendant seeking foreclosure of his mechanic's lien (first count), 7 and claiming damages for breach of contract (second count) and unjust enrichment (third count). The defendant raised the special defense that, because the plaintiff had failed to comply with § 20- 429, the agreement was unenforceable. In his reply in avoidance, the plaintiff contended that the agreement complied with the provisions of § 20-429 or, in the alternative, if the agreement was noncompliant, he could seek restitution from the defendant because the defendant's reliance on § 20-429 was in bad faith. The matter was tried to the court, which concluded that the agreement did not comply with the requirements of § 20-429, but that the plaintiff could nevertheless recover damages from the defendant because the defendant had acted in bad faith. In support of this conclusion, the trial court found that the defendant and others had made numerous requests for extra work without inquiring as to the expense, that the defendant was aware that the plaintiff owed significant debts to his subcontractors and suppliers, and that the defendant terminated the contract between the parties, but then continued to ask the plaintiff to work on the project without any intention of making further payments. The court further found that the defendant "unilaterally and arbitrarily selected a price that he was willing to pay for the project." The court reasoned that, because the defendant knew as of August 4, 2008, when he made his final payment, that the project was "largely complete," he must have believed that the project itself would not be at risk if he made no further payments even if he "could not trick the plaintiff into finishing the entire punch list ...." 8 The trial court also found that the defendant knew that his failure to pay the plaintiff "created a serious risk of putting the plaintiff out of business," and that he "took advantage of [this] fact" to induce the plaintiff to continue to work for him by suggesting that he might make further payments, even though he had no intention of doing so. 9 The defendant increased the pressure for the plaintiff to complete the work when the defendant stated falsely that he would represent himself if the plaintiff brought an action, thereby reminding the plaintiff that, unlike the defendant, he would have to bear legal expenses. The trial court acknowledged, however, that another contractor ultimately completed most of the work that remained to be done after August 4, 2008.
The trial court also acknowledged that "the plaintiff's billing records were poorly maintained" and that "much of the difficulty in preparing the case for trial, trying this case and determining the appropriate resolution of the dispute can be traced directly to the plaintiff's failure to maintain better records. Indeed, the existence of the lawsuit itself is undoubtedly tied to the plaintiff's administrative shortcomings. Just as the parameters of the renovation project [were] a constantly moving target, the precise calculation of the plaintiff's expenses was a difficult exercise, the correct resolution of which is a matter upon which the parties vehemently disagree."
On the basis of these findings, the trial court concluded that the defendant's conduct "constituted a design to mislead and/or deceive the plaintiff." Specifically, the court concluded that the defendant's "decision to make no further payments after August 4, 2008, was not prompted by an honest mistake as to his rights or duties. Instead, this decision was the product of [the defendant's] desire to use the plaintiff to finish the project at no further expense to [the defendant]." In addition, the court concluded that the defendant's course of conduct "was the product of [the defendant's] choosing to serve his own financial interests at the plaintiff's expense." Accordingly, the trial court concluded that the plaintiff was entitled to recover damages from the defendant, notwithstanding the fact that the agreement did not meet the requirements of § 20-429, because the defendant's refusal to pay the amounts due to the plaintiff was in bad faith. The court rendered judgment for the plaintiff in the amount of $214,039.09 on his breach of contract claim. 10 The court also rendered judgment for the plaintiff on all of the defendant's counterclaims. See footnote 2 of this opinion.
The defendant appealed from the judgment of the trial court to the Appellate Court, claiming that the bad faith exception to § 20-429 that this court adopted in
Habetz
v.
Condon
, supra,
This appeal followed. The defendant claims on appeal that this court should overrule the Appellate Court's holding in
Walpole Woodworkers, Inc.
v.
Manning
, supra,
I
We first address the defendant's claim that the legislature's enactment of § 20-429 (f) abrogated the judicially created rule that a homeowner may not avail himself of the protection of the act if the homeowner invokes § 20-429 (a) in bad faith. See
Habetz
v.
Condon
, supra,
This court previously has rejected "the proposition that the futility of asking the trial court to overrule a decision of this court automatically excuses the failure to preserve the claim. Moreover, we [have concluded] that there are good reasons not to adopt such a rule. First, requiring the party to raise the claim would put the other parties on notice of the claim and allow them to properly evaluate their position at the time of trial.... Second, a futility exception to preservation could lead to ambuscade of the trial court." (Citation omitted;
footnote omitted.)
Ulbrich
v.
Groth
,
II
We next address the defendant's claim that the Appellate Court improperly affirmed the trial court's conclusion that the defendant acted in bad faith when he refused to pay the plaintiff the amounts that the plaintiff claimed were due. We agree.
We begin our analysis with the standard of review. This court previously
has held that the question of whether a party acted in bad faith is a question of fact subject to review for clear error.
Habetz
v.
Condon
, supra,
In the present case, we assume the correctness of the trial court's factual findings that: the defendant and others had made numerous requests for extra work without inquiring as to the expense; the defendant was aware that the plaintiff owed significant debts to his subcontractors and suppliers; the defendant terminated the contract between the parties, but then continued to allow the plaintiff to work on the project because he wanted to finish the project at no further expense to himself; the defendant unilaterally and arbitrarily selected the price that he was willing to pay the plaintiff; the defendant knew that his failure to pay the plaintiff would jeopardize the plaintiff's business; and the defendant intended to pressure the plaintiff to complete the work by suggesting that he might make further payments and that, if the plaintiff brought an action against the defendant, the defendant would represent himself. Because we treat the trial court's factual findings as correct, whether this conduct rose to the level of bad faith for purposes of the bad faith exception to § 20-429 is a pure question of law, subject to plenary review.
We turn, therefore, to a review of the relevant law. In
Habetz
v.
Condon
, supra,
We stated in
Habetz
that "[b]ad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not
prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive. ... Bad faith means more than mere negligence; it involves a dishonest purpose." (Citation omitted; internal quotation marks omitted.)
In the present case, the defendant contends that the Appellate Court improperly affirmed the trial court's finding of bad faith because a homeowner does not act in bad faith unless the homeowner "accepts the contractor's services knowing that he has an 'escape hatch' under the [act] which allows him to avoid payment for those services." See
Wadia Enterprises, Inc.
v.
Hirschfeld,
We conclude that the bad faith exception to the bar on a contractor's recovery
under contracts that do not comply with § 20-429 does not apply when a homeowner receives goods and services from a contractor in the belief that they ultimately will have to be paid for, but then repudiates the contract because the contractor's noncompliance with the act gave rise to a genuine, good faith dispute about the scope of the work or the contract price.
15
As we have explained, the very purpose of the act is to place the burden
on the contractor
to provide written documentation, signed by both parties, for "[e]ach change in the terms and conditions of a contract ...." General Statutes § 20-429(a) ("[e]ach change in the terms and conditions of a contract shall be in writing and shall be signed by the owner and contractor"); see also
Habetz
v.
Condon
, supra, 224 Conn. at 239,
In the present case, the trial court made no finding, and the plaintiff points to no evidence that would support a finding, that the defendant knew before August 4, 2008, when the project was largely complete, that he had an "escape hatch" to avoid payment for the goods and services that he was receiving.
16
See
Wadia Enter
prises, Inc.
v.
Hirschfeld,
supra, 224 Conn. at 248,
We further conclude that the defendant's repudiation of the contract after he made his final payment to the plaintiff on August 4, 2008, was not in bad faith. The trial court expressly found that "the plaintiff's billing records were poorly maintained," that "much of the difficulty in preparing the case for trial, trying this case and determining the appropriate resolution of the dispute can be traced directly to the plaintiff's failure to maintain better records," and that these "administrative shortcomings" caused the breakdown of the relationship between the parties that, in turn, led to the defendant's termination of the contract and the plaintiff's legal action. Although the trial court found that, "when [the defendant] made his final payment on August 4, 2008, he had no intention of ever making any further payments," and that the defendant "unilaterally and arbitrarily" decided how much he would pay the plaintiff, the court made no finding, and the plaintiff has cited no evidence that would support a finding, that the defendant knew or should have known that the plaintiff's calculations of the amounts owed to him were
correct, or even close to correct.
18
The only documents that the plaintiff provided
to the defendant after August 4, 2008, were mutually inconsistent lists of work items and prices that were not supported by invoices, receipts, checks or time sheets.
19
Indeed, the trial court
expressly acknowledged that "the parties vehemently disagree" about the amounts that are owed to the plaintiff and that the plaintiff's poor record keeping made it difficult, if not impossible, to determine the precise amounts that he was owed
even after trial
, where the plaintiff had presented extensive documentation of his expenses that he previously had not provided to the defendant. Thus, it is implicit in the trial court's factual findings that the plaintiff's noncompliance with the act gave rise to a genuine, good faith disagreement between the parties as to whether the defendant owed the plaintiff the amounts that the plaintiff claimed. Moreover, even if there were no genuine dispute about the value of the goods and services that the plaintiff actually provided, the plaintiff's failure to comply with the act deprived the defendant of the opportunity to make an informed decision as to whether he should continue to accept goods and services from the plaintiff during the course of the renovation project, which is the core purpose of the act.
20
See
Habetz
v.
Condon
, supra, 224 Conn. at 239,
To the extent that the trial court concluded that the defendant acted in bad faith when he continued to allow the plaintiff to perform work after August 4, 2008, at which point he had decided that he would make no further payments, we disagree. The trial court made no factual findings as to what items of work the plaintiff performed after that date, nor did it make any findings as to when the plaintiff billed the defendant for those items of work, and the plaintiff has cited no evidence that could provide the basis for such findings. Thus, there is simply no way of knowing whether the defendant believed in good faith that he already had paid the plaintiff for the small amount of work that the plaintiff performed after August 4, 2008, 21 and it clearly would not be in bad faith for the defendant to allow the plaintiff to finish work for which the defendant believed that he had already paid. Moreover, it is clear that the defendant's September 3, 2008 e-mail indicating that he was prepared to pay for extra items of work if the plaintiff could establish that the amounts he claimed were correct did not induce the plaintiff to perform substantial additional work, because, according to the mechanic's lien that the plaintiff prepared and placed on the property, "[t]he last day [that] substantial services were performed" on the project was August 29, 2008. 22
Because the trial court did not find, and the evidence would not support a finding, that the defendant received goods and services from the plaintiff with the intent of invoking § 20-429 to avoid paying for them, and because the trial court found that the plaintiff's failure to comply with the requirements of § 20-429(a) gave rise to a genuine dispute about the value of those goods and services, we conclude that the defendant did not act in bad faith when he invoked that statute as a bar to the plaintiff's enforcement action. Accordingly, we conclude that the Appellate Court improperly affirmed the judgment of the trial court that the plaintiff was entitled to recover damages from the defendant notwithstanding the fact that the agreement between the parties did not comply with § 20-429.
The judgment of the Appellate Court is reversed in part and the case is remanded to that court with direction to remand the case to the trial court with direction to render judgment for the defendant on the first and second counts of the plaintiff's complaint; the plaintiff's appeal from the Appellate Court affirming the trial court's denial of his request for attorney's fees is dismissed as moot.
In this opinion PALMER, EVELEIGH, McDONALD and VERTEFEUILLE, Js., concurred.
ROBINSON, J., with whom ESPINOSA, J., joins, dissenting.
I respectfully disagree with the majority's decision in the first certified appeal, SC 19560, to reverse the judgment of the Appellate Court affirming the trial
court's judgment in favor of the plaintiff contractor, James E. Burns, Jr., on the ground that the conduct of the defendant homeowner, David Y. Adler,
1
did not fall within the bad faith exception to the statutory bar on the enforcement of contracts that do not comply with the requirements set forth in General Statutes (Rev. to 2007) § 20-429.
2
See
Burns
v.
Adler
,
I
I begin by noting my agreement with the background facts and procedural history set forth in the majority opinion. I also agree in limited part with the majority's
statement of the standard of review. Specifically, I agree that the issue of whether the plaintiff can invoke the bad faith exception in this case presents a question of law over which our review is plenary, albeit only to the extent that the defendant's claims on appeal require this court to define the contours of that doctrine. See, e.g.,
Thompson
v.
Orcutt
,
I begin with the majority's analysis of the defendant's claims on appeal, which, notwithstanding footnote 16 of the majority opinion, may be misconstrued as embracing an unduly narrow approach to the bad faith exception. In particular, I wish to emphasize my disagreement with the defendant's position, founded largely on this court's decision in
Wadia Enterprises, Inc.
v.
Hirschfeld
, supra, 224 Conn. at 240,
At the outset, I briefly discuss the statutory scheme governing home improvement contract disputes and the history of the bad faith exception in Habetz . " Section 20-429(a) provides that no home improvement contract shall be valid or enforceable against a homeowner unless it contains certain enumerated criteria. The aim of the [act] is to promote understanding on the part of consumers with respect to the terms of home improvement contracts and their right to cancel such contracts so as to allow them to make informed decisions when purchasing home improvement services....
"In
Barrett Builders
v.
Miller
,
In formally adopting the bad faith exception,
7
this court emphasized in
Habetz
that its "central element ... is the recognition that to allow the homeowner who acted in bad faith to repudiate the contract and hide behind the act would be to allow him to benefit from his own wrong, and indeed encourage him to act thusly. Proof of bad faith therefore serves to preclude the homeowner from hiding behind the protection of the act. ... [W]e need look no further than the maxim that no person may take advantage of his own wrong. ... This deeply rooted principle has been applied in many diverse classes of cases by both law and equity
courts and has frequently been employed to bar what would
otherwise be inequitable reliance on statutes."
8
(Citations omitted; footnote omitted.)
Habetz
v.
Condon
, supra, 224 Conn. at 237-38,
Applying the bad faith exception in
Habetz
, this court upheld the judgment of the trial court with respect to a contractor's counterclaim for unpaid sums, despite the fact that the contract violated § 20-429(a) by lacking a notice of cancellation provision-a defect that the trial court had deemed "minor." (Internal quotation marks omitted.) Id., at 233-35,
Rather than confine the bad faith exception to a limited array of homeowner conduct involving the knowing acceptance of services under a noncompliant agreement, I believe that case law from this court and the Appellate Court suggests that, consistent with its equitable and fact dependent nature, the bad faith exception is applicable
to a wide variety of homeowner misconduct. First, in
Habetz
itself, the court suggested that the bad faith exception may have broad applicability. See
I disagree with the defendant's position that
Wadia Enterprises, Inc.
v.
Hirschfeld
, supra, 224 Conn. at 240,
Our Appellate Court has followed
Wadia Enterprises, Inc.
, in rejecting claims of bad faith in cases wherein-at least in my view-the homeowners or their agents engaged in conduct that should place them beyond the protections of the act-at least by estoppel-such as actively participating in the drafting of the defective contract. See
Lucien
v.
McCormick Construction, LLC
,
I believe that
Wadia Enterprises, Inc.
, was wrongly decided, even beyond its apparent suggestion that the homeowner or their representative must harbor intent to draft a defective contract as an escape hatch in order for the bad faith exception to apply.
Wadia Enterprises, Inc.
, is inconsistent with both the bad faith exception and the purpose of the act, which is to protect consumers from unscrupulous contractors employing high pressure sales tactics and performing substandard work.
Habetz
v.
Condon
, supra, 224 Conn. at 239,
The Appellate Court's decision in
Kronberg Bros., Inc.
v.
Steele
,
Accordingly, I conclude that the Appellate Court properly determined that the bad faith exception is not limited to claims
that the homeowner accepted services from the contractor intending to rely on a known defect in the contract to avoid payment.
10
See
Burns
v.
Adler
, supra,
B
Relying heavily on evidence of the plaintiff's disorganized bookkeeping practices as part and parcel of his failure to comply with the act's documentation requirements, the majority further concludes that the defendant's conduct after he made a final payment on August 4, 2008, was not in bad faith because the trial court "made no finding, and the plaintiff has cited no evidence that would support a finding, that the defendant knew or should have known that the plaintiff's calculations of the amounts owed to him were correct, or even close to correct." The majority posits that "it is implicit in the trial court's factual findings that the plaintiff's noncompliance with the act gave rise to a genuine, good faith disagreement between the parties as to whether the defendant owed the plaintiff the amounts that the plaintiff claimed. Moreover, even if there were no genuine dispute about the value of the goods and services that the plaintiff actually provided, the plaintiff's failure to comply with the act deprived the defendant of the opportunity to make an informed decision as to whether he should continue to accept goods and services from the plaintiff during the course of the renovation project ...." The majority further emphasizes that the trial court "made no factual findings as to what items of work the plaintiff performed after [August 4, 2008], nor did it make any findings as to when the plaintiff billed the defendant for those items of work, and the plaintiff has cited no evidence that could provide the basis for such findings. Thus, there is simply no way of knowing whether the defendant believed in good faith that he already had paid the plaintiff for the small amount of work that the plaintiff performed after August 4, 2008, and it clearly would not be in bad faith for the defendant to allow the plaintiff to finish work for which the defendant believed that he had already paid." (Footnote omitted.) I respectfully disagree with these conclusions because I believe that the majority's reliance on certain "implicit" findings represents an intrusion into the trial court's explicit factual findings.
I begin by noting that the majority's recitation of the governing principles is generally consistent with this court's statement of the law in
Wadia Enterprises, Inc.
v.
Hirschfeld
, supra, 224 Conn. at 249,
This statement of the law does not, however, alter the fundamentally factual nature of the bad faith inquiry;
Renaissance Management Co.
v.
Connecticut Housing Finance Authority
, supra,
Turning to the facts in the present case, I agree with the Appellate Court's appropriately deferential treatment of the inferences drawn by the trial court in its rejection of the defendant's claim that "the alleged bad faith in this case involved nothing more than a homeowner's refusal to pay disputed charges arising from a contract dispute ...."
Burns
v.
Adler
, supra,
II
I next address the plaintiff's certified appeal from the judgment of the Appellate Court affirming the trial court's denial of his motion for attorney's fees upon
the foreclosure of a mechanic's lien pursuant to § 52-249(a). See id., at 808,
On appeal, the plaintiff contends that the Appellate Court improperly concluded that the "hearing" requisite to the award of attorney's fees had not occurred because the terms of the foreclosure were determined by stipulation and in-chambers conferences, rather than in a hearing. The plaintiff argues that this approach is unworkable because it elevates "form over substance" by requiring the court to convene on the record for a very brief hearing. To this end, the plaintiff relies on
A. Secondino & Son, Inc.
v.
LoRicco
,
In response, the defendant emphasizes that the proceedings in this case were bifurcated between the foreclosure and underlying unjust enrichment and breach of contract counts, and that the parties' subsequent stipulation resolving the plaintiff's motion for a supplemental judgment obviated the need for a hearing on the foreclosure remedy. Thus, the defendant contends that the plaintiff's "form over substance" arguments ask this court to rewrite the plain and unambiguous language of § 52-249(a), which calls for a specific type of hearing as a prerequisite to an award of attorney's fees, namely, one to determine the form of the foreclosure judgment and the defendant's right of redemption; he posits that requiring the
plaintiff to pay his own attorney's fees in the absence of such a hearing is consistent with the common-law American rule under which parties pay their own attorney's fees absent a statutory or contractual exception. See, e.g.,
ACMAT Corp.
v.
Greater New York Mutual Ins. Co.
,
Whether § 52-249(a) permits an award of attorney's fees when the foreclosure judgment is the product of a stipulation rather than an on-the-record hearing "presents a question of statutory construction over which we exercise plenary review.... When construing a statute, [o]ur fundamental objective is to ascertain and
give effect to the apparent intent of the legislature.... In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. ... In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered. ... When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter .... The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation." (Citation omitted; footnote omitted; internal quotation marks omitted.)
Tomick
v.
United Parcel Service, Inc.
,
I am mindful that, "[i]n determining whether ... a statute abrogates or modifies a common law rule the construction must be strict, and the operation of a statute in derogation of the common law is to be limited to matters clearly brought within its scope. ... Thus, [n]o statute is to be construed as altering the common law, farther than its words import [and a statute] is not to be construed as making any innovation upon the common law which it does not fairly express. ... We recognize only those alterations of the common law that are clearly expressed in the language of the statute because the traditional principles of justice upon which the common law is founded should be perpetuated."
Citations omitted; internal quotation marks omitted.)
Ames
v.
Commissioner of Motor Vehicles
,
As required by § 1-2z, I begin with the text of the statute. Section 52-249(a) provides in relevant part: "The plaintiff in any action of foreclosure of a mortgage or lien, upon obtaining judgment of foreclosure,
when there has been a hearing as to the form of judgment or the limitation of time for redemption
, shall be allowed the same costs,
including a reasonable attorney's fee
, as if there had been a hearing on an issue of fact. ..." (Emphasis added.) Given the strict construction that we must afford § 52-249(a), I conclude that the Appellate Court properly upheld the trial court's denial of the plaintiff's request for attorney's fees because no hearing on the foreclosure remedy took place in the present case. Specifically, the parties stipulated during trial that the foreclosure and merits proceedings in the present case were to be bifurcated, and the conduct of the proceedings reflects this stipulation. Once the plaintiff had prevailed at the court trial, the foreclosure remedy was the product of a second stipulation resolving the plaintiff's motion for a supplemental judgment, rather than a judicial decision following an in-
court proceeding.
15
This stipulated judgment procedure was inconsistent with the very specific language that the legislature used in drafting § 52-249(a), which requires "a hearing as to the form of judgment or the limitation of time for redemption ...."
16
Allowing the stipulation to substitute for the required hearing,
17
as
urged by the plaintiff, would run afoul of the maxim that "a court must construe a statute as written. ... Courts may not by construction supply omissions ... or add exceptions merely because it appears that good reasons exist for adding them. ... The intent of the legislature, as this court has repeatedly observed, is to be found not in what the legislature meant to say, but in the meaning of what it did say. ... It is axiomatic that the court itself cannot rewrite a statute to accomplish a particular result. That is the function of the legislature."
18
(Internal quotation marks omitted.)
Marciano
v.
Jimenez
,
I disagree with the plaintiff's argument that this interpretation of § 52-249(a) leads to an unworkable result in contravention of § 1-2z because a defendant can avoid liability for attorney's fees by simply paying the debt at the conclusion of the trial, rather than appealing it, thus obviating the need for a hearing to set the terms of the foreclosure judgment because the underlying debt would have been paid. The plaintiff argues that the "only way to avoid such an unjust result is to conclude
that when trial commenced on all counts of the complaint, including establishing the debt which ... was essential for the mechanic's lien foreclosure action, that the hearing mandated by ... § 52-249(a) commenced at that time." In my view, providing a judgment debtor with incentive to satisfy a debt immediately, rather than take an appeal or incur a judgment of foreclosure that would bring into play an attorney's fee award under § 52-249(a), is not an unworkable result because it promotes the speedy resolution of disputes following the court's determination of the debt.
19
I, therefore, conclude that the Appellate Court properly upheld the trial court's denial of the plaintiff's request for attorney's fees.
20
Burns
v.
Adler
, supra,
Footnotes
155 A.3d 1223 (Burns v. Adler) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.