II LLC v. First American Title Insurance Company et al. (2010)

MEMORANDUM OF DECISION

FACTS AND PROCEDURE:

The only remaining defendant in this matter is Alan C. Guarco (hereinafter also “Guarco”), the other parties having settled with the plaintiff Luv Monkey II, LLC (hereinafter also “Luv Monkey”), and/or the claims against them having been withdrawn.

Guarco was the owner of a commercial piece of property located at 1 Masscaro Street, Simsbury, Connecticut which he agreed to sell to one, Attorney David Eric Ross, trustee (hereinafter also “Ross”) who supposedly was acting on behalf of the plaintiff, pursuant to a real estate purchase agreement dated 3/28/05, which is plaintiff's Exhibit 16.   The purchase price was $510,000, and the purchase took place on or about April 25, 2005.   The broker was Samuel Macaluso (hereinafter also “Broker”) who was an agent for Prudential CT Realty.   He became a dual agent representing Buyer (Ross) and Seller (Guarco) on 3/17/05 plaintiff's Exhibit 10.   See also paragraph eight of defendant's Exhibit A which is an affidavit by the plaintiff in support of an application for prejudgment remedy.   The issue between the parties is that the plaintiff claims that there were outstanding fire code violations on the property and was never informed of same by Guarco.

During a rather short trial before this Court, the plaintiff presented its evidence and rested which resulted in Guarco's attorney moving, orally, to dismiss the plaintiff's case based upon failure to make out a prima facie case.   Briefs were then filed by the parties, and the Court denied the motion to dismiss primarily based upon the ruling in Moss v. Foster, 96 Conn.App. 369, 378 (2006), which stated that the standard on a Motion to Dismiss on this issue is “whether the plaintiff put forth sufficient evidence that, if believed, would establish a prima facie case, not whether the trier of fact believes it .. .” (Emphasis in original.)   This Court interpreted that ruling to mean that the Court in regard to such a Motion to Dismiss was required to believe the plaintiff's evidence.

Following that ruling, Guarco filed a letter stating that said defendant “RESTED.”   This Court advised all attorneys that it would accept such a pleading as “DEFENSE RESTS” as the conclusion of the case unless the Court were to hear from either of the parties wanting “THE DEFENSE RESTS” to be stated in open court.   This notification was to be done within seven days as well as notification of whether the parties wanted to file additional briefs.   No objection to taking “THE DEFENSE RESTS” by Guarco's attorney without putting it on the record in open court was received, and neither party requested to file additional briefs.

STANDARD OF REVIEW:

“The plaintiff in a civil case sustains its burden of proof as to any essential element in its cause of action if the evidence, considered fairly and impartially, induces in the mind of the trier, a reasonable belief that it is more probable than otherwise that the facts involved in that element are true.”  Busker v. United Illuminating Co., 156 Conn. 456, 458 (1968).   This is also knows as proof by a preponderance of the evidence.

In addition, this Court evaluates the credibility of the witnesses based upon their appearance and demeanor on the witness stand, the consistency or inconsistency of their testimony, their memory or lack thereof of certain events, whether they were candid and forthright or evasive and incomplete, their manner in responding to questions and their interest or lack of interest in the case.

Also, the Court evaluates general credibility on the basis of other testimony in this case as well as documents in evidence as to their consistency or inconsistency with other evidence.

The burden is on the plaintiff to prove its allegations by a preponderance of the evidence.

ISSUES AND FINDINGS:

1. Credibility.

The Court finds that the credibility of Guarco was superior to that of the plaintiff's witnesses.   Guarco's good credibility is in sharp contrast to the credibility of Paul Breunich who was part of the plaintiff and throughout his testimony he was parsing his words and was evasive.   The Court also found a lack of credibility in the Broker.

2. Was the Plaintiff Notified of the Alleged Fire Code Violations?

The short answer is Yes.

Guarco made the Broker aware of the alleged fire code violations prior to the sale at which time the Broker was representing the plaintiff under the dual agency.   The Broker was the agent of the plaintiff, and his knowledge is certainly imputed to the plaintiff and/or Ross.¹ Since the plaintiff was notified by notification to its agent, there is no non-disclosure.

3. Was the Property Sold “AS IS”?

The short answer is No.

Guarco, the Broker and Mr. Brunich of the plaintiff all agreed that the property was sold “as is.”   However, there is nothing in the written purchase agreement that says so, and a verbal agreement cannot amend the written agreement.

4. Is Paragraph 17 of the Real Estate Purchase Agreement Damaging to the Plaintiff's Case?

The short answer is Yes.

Paragraph 17 provides in pertinent part as follows:  “Buyer waives any right to object to any defects in the property and other improvements that would have been disclosed by a full and complete inspection.”   Buyer was given the right to inspect, and paragraph 17 goes on to say:  “If an inspection report given by buyer to seller on or before the inspection contingency date reveals that the property or other improvements do not meet the terms set forth ․ then buyer may terminate this contract by giving seller written notice of termination ․ Failure by buyer to so terminate relieves seller from all responsibility and obligation concerning any condition to which this paragraph 17 applies.”   Buyer expressed no dissatisfaction with the inspection, did not do full title searches including municipal code violations or building department review for code compliance.   Paragraph 17 is a waiver of any claims for defects which an inspection found or could have found, in particular possible fire code violations.

5. Was the Plaintiff the Buyer?

It appears that the plaintiff was not.   There is no right of assignment from the buyer listed as David Eric Ross, trustee, and no evidence was brought forth to show that he was trustee for the plaintiff.   Accordingly, it is certainly questionable as to whether the plaintiff has standing in this case.   The Court will not make a definitive ruling on this issue because it is often customary for a formal buyer to then quit claim his interest to another party, and the warranty deed was made out to the plaintiff.   However, since the plaintiff was not the buyer until the warranty deed was transferred, it was certainly questionable as to whether any non-representations to the plaintiff were made prior to the transfer of the deed.   Apparently, until the deed was signed, Guarco didn't even know who the buyer was.   So it is highly questionable as to whether his Non-Disclosure as alleged would have encompassed the plaintiff.

CONCLUSION

For all the foregoing reasons, judgment is entered on the complaint for the defendant, Guarco.   In its brief the plaintiff mentions only four counts as to Guarco.   On Count One the Court finds for Guarco on the allegation of misrepresentation by Non-Disclosure.   As to Count Three the Court finds for Guarco on a claim of a CUTPA violation, and the Court finds for the defendant Guarco on Count Five alleging negligence as well as Count Seven for Breach of Covenant of Warranty.

The Court also orders immediate release by the plaintiff/Ross of all liens against any property now or formerly of Guarco.

Rittenband, J.T.R

FOOTNOTES

FN1. Whether or not there was an actual violation is technically in question because the premises were not occupied at the time of the fire marshal's visit, and there would be no specific violation until the fire marshal knew the use of a new tenant of the subject premises.   However, records involving a possible violation were in the fire marshal's records and were not discovered by the title searcher who according to the fire marshal's records did not even ask about any possible violations and the title searcher advised the plaintiff or Attorney Ross that the premises were clear and complied with all municipal codes including a possible fire code violation.   It would appear that the real culprit here would be the title searcher..  FN1. Whether or not there was an actual violation is technically in question because the premises were not occupied at the time of the fire marshal's visit, and there would be no specific violation until the fire marshal knew the use of a new tenant of the subject premises.   However, records involving a possible violation were in the fire marshal's records and were not discovered by the title searcher who according to the fire marshal's records did not even ask about any possible violations and the title searcher advised the plaintiff or Attorney Ross that the premises were clear and complied with all municipal codes including a possible fire code violation.   It would appear that the real culprit here would be the title searcher.

Rittenband, Richard M., J.T.R.