Patricia Snyder et al. v. LLC (2009)

MEMORANDUM OF DECISION

The plaintiffs, Patricia Snyder and Richard Fagan base this suit on the conduct of the defendants, Chestnut Grove, LLC and Allen D'Antonio, which conduct is alleged to constitute a breach of contract, violation of the New Home Construction Contractor's Act, the Connecticut Unfair Trade Practices Act (CUTPA), and statutory theft pursuant to Conn. Gen.Stat. § 52-564.   They seek relief in the form of money damages, prejudgment interest pursuant to Conn. Gen.Stat. § 37-3a(a), treble damages, interests, costs and attorneys fees.

Beginning in the fall of 2006 the parties initiated negotiations of a contract for the defendant ¹ to construct, and sell to the plaintiffs, a single-family residential dwelling on a subdivision lot owned by the defendant in Madison, Connecticut.   These negotiations culminated in a construction and sale contract signed by the parties on March 13, 2007.²  The only other date appearing in the contract is a closing date of October 15, 2007.   Growing concerned about a perceived lack of progress on the lot, the plaintiffs called an on-site meeting at lot 11 (the subject property) on May 16, 2007, where very little ground work had been done.   The plaintiffs were especially concerned that there was no “hole in the ground” indicating the start of any actual construction, according to the plaintiffs.   Mrs. Snyder was unwilling to place her existing house on the market for sale before she saw a hole in the ground on lot 11.   Until that time, she was skeptical that she could move out of her home into a completed house on lot 11 by October 15, 2007.   At the May 16 meeting, the positioning of the house was changed by agreement, and there was conflicting testimony as to whether the defendants said they would have a hole in the ground “next week” or “shortly.”   At that point, the defendant had not yet obtained a full building permit, but also not exercised its option to withdraw from the contract if it could not obtain the permit within 60 days of the contract date, pursuant to paragraph 22 of the construction contract.³

By June 18, 2007, the plaintiffs believed that it was not possible for the defendant to complete the house by October 15, 2007, and expressed a desire to terminate the contract in a letter dated June 18, 2007 from the plaintiff Mr. Fagan to D'Antonio, and requested the return of their deposit.⁴  On June 28, 2007, the parties entered into a “termination of purchase and sale agreement” (Termination Agreement) wherein the plaintiffs' deposit was to be returned to them.

Count One

The plaintiffs allege in Count One that the defendant breached its contract by failing to return their deposit of $83,200.   From the evidence it is clear that the deposit has never, indeed, been returned to the plaintiffs and the court so finds.

Count Two

This Count alleges a breach of the Termination Agreement as against D'Antonio.   The court granted D'Antonio's motion to dismiss this Count at the completion of the trial, since the Termination Agreement was with the defendant, and not with D'Antonio.

Count Three

The plaintiffs alleged in this Count a violation of Conn. Gen.Stat. § 20-417d(a) of the New Home Construction Contractors Act because the defendant was not registered under the Act, and because it did not return the plaintiffs' deposit within 10 days of their request as required by Conn. Gen.Stat. § 20-417d(d)(7).   Plaintiffs further allege that by violating the New Home Construction Contractors Act, the defendant violated the Connecticut Unfair Trade Practices Act (CUTPA).

There is no evidence in the case that the defendant was not a registered new home contractor, and thus the plaintiffs have failed to prove that claim.   As to the plaintiffs' claim of violation of Conn. Gen.Stat. § 20-417d(d)(7) because of the defendant's failure to return the deposit within 10 days of their request, we are brought to the key and despositive document in this case, the Termination Agreement.   Executed in full no later than June 28, 2007 the document designated “Termination of Purchase and Sale Agreement” is much more than that.   It represents a mutual release of each party by the other of all claims arising out of the building contract.   It reads in relevant part as follows:

(1.) The Seller(s) and Buyer(s) entered into a Purchase and Sale Agreement dated 2/23/07 (sic).

(2.) The Buyer hereby unconditionally waives and releases any claim against the Seller arising under the Purchase and Sale Agreement or by reason of its termination.

(3.) The Seller(s) hereby unconditionally waives and releases any claim against the Buyer(s) arising under the Purchase and Sale Agreement or by reason of its termination.

As stated above, this document was executed by both parties by June 28, 2007, within 10 days of the plaintiffs' request for the return of their deposit.   The Termination Agreement is clear and unambiguous.   It simply constitutes a mutual release of the parties from all liability under the sale and purchase agreement of March 13, 2007 and the understanding that the plaintiffs' deposit was to be returned.   Thus, there can be no claim by the plaintiffs of a violation of § 20-417d(d)(7) of the New Home Construction Contractors Act nor of a per se violation of CUTPA.

Count Four

This Count against D'Antonio was dismissed at trial because he was not a party to the sales and construction contract.

Count Five

The plaintiffs allege that the defendant has violated the Conn. Gen.Stat. § 52-564, statutory theft, and seek treble damages pursuant thereto.   The standard of proof in cases under this statute is clear and convincing evidence.  Stuart v. Stuart, 112 Conn.App. 160, 176, 962 A.2d 842 (2009).   “The phrase clear, substantial and convincing evidence fairly characterizes that degree of belief that lies between the belief that is required to find the truth or existence of the issue of fact in an ordinary civil action and the belief that is required to find guilt in a criminal prosecution.   In cases such as this which require such a proof, the burden of persuasion is sustained if the evidence induces in the mind of the trier a reasonable belief that the facts asserted are highly probably true, that the probability that they are true or exist is substantially greater than the probability that they are false or do not exist.   This is the quality of the evidence required in cases of this type.”  (Citations omitted;  internal quotations marks omitted.)  Lopinto v. Haines, 185 Conn. 527, 535, 441 A.2d 151 (1981).

After the execution of the Termination Agreement the defendant had opportunities to repay the plaintiffs all or part of the deposit, but did not.   Later, after the suit was initiated, the defendant offered to return all or part of the deposit, but the plaintiffs rejected the offer.

Statutory theft, for which treble damages are required, is synonymous with larceny under Conn. Gen.Stat. § 53-119.  Suarez-Negrete v. Trotta, 47 Conn.App. 517, 705 A.2d 215 (1998).   Because the plaintiffs have not carried their heighten burden of proof that the defendant acted with the requisite intent to permanently deprive them of their money, their claim for treble damages pursuant to § 52-564 must fail.  Whitaker v. Taylor, 99 Conn.App. 719, 916 A.2nd 834 (2007).

Count Six

At trial, the court reserved decision on a Motion to Dismiss this Count of statutory theft against D'Antonio.   For the reasons stated in this Memorandum of Decision relating to Count Five, the court grants the Motion to Dismiss as to this Count.

Conclusion

In their claims for relief the plaintiffs request money damages, prejudgment interest pursuant to Conn. Gen.Stat. § 37-3a, treble damages, interest, costs and attorneys fees.

The court awards money damages for breach of the Termination Agreement.   A reasonable period of time within which the defendant should have returned the plaintiffs' deposit is 10 days following the date of execution of the Termination Agreement, June 28, 2007.   Thus the court awards interest on money wrongfully withheld pursuant to Conn. Gen.Stat. § 37-3a(a) from July 8, 2007.   There being no liability found by the court on the part of the defendants under the sale and purchase agreement and no liability under Conn. Gen.Stat. § 52-564, statutory theft, the plaintiffs are not entitled to treble damages.

The Termination Agreement, which does not contain a provision for attorneys fees to be awarded to the prevailing party in a lawsuit, as did the original contract of March 13, 2007, ended either party's right to such fees.   Attorneys fees under CUTPA cannot be granted because the CUTPA claim is derivative of the failed claim under the New Home Construction Contractor Act. No separate allegation was made in the complaint of any independent CUTPA claim, nor did the plaintiffs present, in their brief, any analysis of the elements required to satisfy a claim for a violation of that Act.

Accordingly, judgment shall enter in favor of the plaintiffs and against the defendant in the amount of $83,200 plus interest at the rate of 10% per annum on said amount, from July 8, 2007 to the date of judgment, plus taxable costs.⁵

So ordered.

D'ANDREA, J.T.R.

FOOTNOTES

FN1. The defendant Chestnut Grove, LLC will be referred to herein as the defendant.   When reference is made to the defendant Allen D'Antonio, he will be referred to as D'Antonio..  FN1. The defendant Chestnut Grove, LLC will be referred to herein as the defendant.   When reference is made to the defendant Allen D'Antonio, he will be referred to as D'Antonio.

FN2. The contract also purports to be dated March 6, 2007;  the court will use March 13, 2007 as the date of the contract..  FN2. The contract also purports to be dated March 6, 2007;  the court will use March 13, 2007 as the date of the contract.

FN3. Paragraph 22 of the building contract reads as follows:  “It is hereby agreed and understood that the obtaining by Seller, of all necessary licenses, permits, and approvals relevant to performance of this Agreement, including, but not limited to, zoning approval and building permits, shall serve as a condition precedent to Seller's obligation to perform under this Agreement, and in the event that Seller is unable to obtain any such licenses, permits or approvals within sixty (60) days after the execution of this Agreement, Seller shall notify Buyer.   In such case, Seller may elect to treat this Agreement as having no force and effect and Buyer's remedies shall thereby be limited to return of deposits paid, without interest..  FN3. Paragraph 22 of the building contract reads as follows:  “It is hereby agreed and understood that the obtaining by Seller, of all necessary licenses, permits, and approvals relevant to performance of this Agreement, including, but not limited to, zoning approval and building permits, shall serve as a condition precedent to Seller's obligation to perform under this Agreement, and in the event that Seller is unable to obtain any such licenses, permits or approvals within sixty (60) days after the execution of this Agreement, Seller shall notify Buyer.   In such case, Seller may elect to treat this Agreement as having no force and effect and Buyer's remedies shall thereby be limited to return of deposits paid, without interest.

FN4. The plaintiffs had given a deposit of $83,200 being 10% of the purchase price of $832,000 which the defendant was still holding..  FN4. The plaintiffs had given a deposit of $83,200 being 10% of the purchase price of $832,000 which the defendant was still holding.

FN5. In simple explanation of this decision, the plaintiffs failed to protect themselves when signing the Termination Agreement, depriving them of any rights they may have had under the contract of March 13, 2007, being the new home contract from which all of the plaintiffs' statutory rights flowed..  FN5. In simple explanation of this decision, the plaintiffs failed to protect themselves when signing the Termination Agreement, depriving them of any rights they may have had under the contract of March 13, 2007, being the new home contract from which all of the plaintiffs' statutory rights flowed.

D'Andrea, Frank H., J.T.R.