Haynes Material Company v. Brian T. Scott et al. (2011)

MEMORANDUM OF DECISION

On or about January 26, 2009, the plaintiff, Haynes Materials Company, (Haynes), filed this complaint in two counts against the defendants, Brian Scott and B & D Real Estate.   Count one seeks foreclosure of a mechanic's lien and count two sounds in unjust enrichment.   The matter was tried to the court on October 28, 2010, subsequent to which the parties filed post-trial briefs.   Based on the evidence produced the court makes the following findings of fact.

The defendant Brian Scott (Scott), an attorney admitted to practice law in Connecticut who has been reprimanded by the Statewide Grievance Committee, lives at 3200 Huntington Road, Stratford, Connecticut (“the property”).   The defendant B & D Real Estate, LLC. (B & D) now holds title to the property.   The defendant Scott and his wife are members of the LLC. Scott owns five properties under the name B & D Real Estate.   Scott transferred this property from himself to B & D.

Scott purchased the 3200 Huntington Road property in September 2007, when it was empty land.   He started working on the property even before the closing.   Scott considered himself the general contractor on the house.   He subcontracted out some of the work but he did most of the work himself and considered that he built the house.   Scott had no contract with the plaintiff, Haynes Materials Company.

Scott, acting as “owner,” did enter into a contract on September 5, 2007, with CRC Real Estate Development, LLC (CRC), acting as “contractor,” to provide excavation services for a new foundation, to pour a concrete foundation and footings, and to install a septic system at the property.  (Defendants Ex. A).¹  Neither Scott nor B & D ever had a contract, oral or written, with the plaintiff, Haynes Materials Company.   Under the CRC contract, Scott and CRC agreed that the cost of the work was to be $45,000.00 broken down as follows: 1) Excavation for a new foundation:  $15,000.00;  2) Foundation and footings:  $15,000.00;  and 3) Septic System:  $15,000.00. Among the terms of the CRC contract is a provision on the second page titled “Exclusions from Above Pricing” providing possible charges which would not be included in the $45,000.00 contract amount.   The last exclusion thereunder stated “Concrete in excess of 65 cubic yards will be billed @ $250.00/cubic yard.”

Scott (using defendant B & D checks) paid CRC a total of $39,190.00 as follows:

Date Check No. Amount

10/1/07 387 $ 6,000.00

10/3/07 388 $13,690.00

10/11/07 390 $ 7,500.00

10/26/07 392 $12,000.00

While Scott claims that the last check for $12,000.00 constituted payment in full for the concrete, the court does not credit this self-serving testimony since it is contrary to other evidence including the contract.

Pursuant to the contract CRC provided the excavation services and provided the foundation and footings.   CRC did not install the septic system.   Scott admitted that concrete material for the foundation and footings was furnished to and installed in the property.   Additionally, Scott admitted that during the performance of the subcontract, he changed the size of the foundation.

According to Haynes' business records including invoices and twelve delivery tickets, Haynes delivered concrete materials to the property between October 2 and October 26, 2007.   While the contract between CRC and Scott called for 65 cubic yards of concrete Haynes delivered approximately 117 cubic yards to the site.   The extra 52 cubic yards were to be billed at $250.00 per yard for a total of $13,000.00.

When payment in full was not received for the concrete deliveries to the property, collection activities were commenced by Haynes.   A representative of Haynes, the credit and collections manager, spoke with both Scott and Matthew Rownin, a member of CRC Real Estate Development, LLC. As part of its collection activities, Haynes filed a mechanic's lien against the property, 3200 Huntington Road, Stratford.   Haynes claimed in its lien against Scott that the amount owed is $13,499.37 in principal, not including interest and fees.

After the concrete was furnished and installed but prior to CRC's completing all the work called for in the contract, Scott and CRC dissolved their relationship.   The total amount due to CRC under the original contract was $45,000.00 for the three phases of the project and $30,000.00 for the two completed phases (not including extra concrete).   Scott claims to have paid CRC $39,190.00 for the first two phases, including the extra concrete.

Thereafter, on January 29, 2008, Scott contracted with Frank's Septic and Excavating to perform septic work that was to have been done by CRC under the contract.   Between January 30, 2008 and April 25, 2008, Scott paid Frank's Septic and Excavating $11,500.00 to install a septic system at the property.

Scott admittedly has not paid in full all of his subcontractors or material suppliers for the project.

LEGAL DISCUSSION

In count one of its complaint Haynes seeks the foreclosure of a mechanic's lien on the Scott property.  “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.   Although the mechanic's lien statute creates a statutory right in derogation of the common law ․ its provisions should be liberally construed in order to implement its remedial purpose of furnishing security for one who provides services or materials ․ Our interpretation, however, may not depart from reasonable compliance with the specific terms of the statute under the guise of a liberal construction ․” (Citations omitted;  internal quotation marks omitted.)  Intercity Development, LLC v. Andrade, 286 Conn. 177, 183–84, (2008).

Connecticut General Statutes § 49–33 provides statutory authority for mechanic's liens as follows:

(a) If any person has a claim for more than the dollars for materials furnished or services rendered in the construction, raising, removal or repairs of any building or any of its appurtenances or in the improvement of any lot or in the site development or subdivision of any plot of land, and the claim is by virtue of an agreement with or by consent of the owner of the land upon which the building is being erected or has been erected or has been moved, or by consent of the owner of the lot being improved or by consent of the owner of the plot of land being improved or subdivided or some person having authority from or rightfully acting for the owner in procuring labor or materials, the building, with the land on which it stands or the lot or in the event that the materials were furnished or services were rendered in the site development or subdivision of any plot of land, then the plot of land, is subject to the payment of the claim.

Connecticut General Statutes § 49–33(f) provides in relevant part that a subcontractor shall be subrogated to the rights of the person through whom the subcontractor claims ․

Here, the parties agree that “Under Connecticut law, a subcontractor's right to enforce a mechanic's lien against a property owner is based on the doctrine of subrogation ․ The theory of subrogation allows the plaintiff to recover only to the extent the general contractor could recover from the defendants.”   (Internal citation omitted.)   W.B. Glenney Co. v. Bianco, 27 Conn.App. 199, 201 (1992).

In the present case, the defendant Scott claimed to be the general contractor on the property.   However, Scott entered into a construction contract (DX.A) with CRC on September 5, 2007, wherein CRC was identified as the “contractor” and Brian Scott was identified as the “owner.”   The construction contract was for the work in question to be performed at the property, 3200 Huntington Road, Stratford.

Thus, Haynes can recover under the theory of subrogation only to the extent that CRC could recover from the defendants.   Haynes is limited in its recovery to what CRC could have recovered from the defendants, the lienable fund.   The lienable fund is limited to “the unpaid contract debt owed by the owner to the general contractor.”  Seaman v. Climate Control Corp., 181 Conn. 592, 602 (1980).   The lienable fund is the difference between the amount the owner agreed to pay and that which he has already paid.

Here, the contract anticipated additional payments due for concrete in excess of 65 cubic yards, to be billed at $250.00 per cubic yard. 117 cubic yards of concrete were delivered to the property by Haynes.   Thus, under the terms of the contract, an additional $13,000.00 was due to CRC from the defendants.   Scott was indebted to CRC under the terms of the contract for an additional $13,000.00, which is the lienable fund according to the plaintiff's argument.

However, under the CRC contract, the agreed upon cost of the work was to be $45,000.00 broken down as follows:  excavation for a new foundation:  $15,000.00;  foundation and footings:  $15,000.00;  and septic system:  $15,000.00. Since the septic system was never installed, the resulting contract price for the work performed was $30,000.00.   Adding in the $13,000.00 for additional concrete as delivered by the plaintiff would raise the total contract price to $43,000.00.   However, Scott actually paid CRC $39,190.00.   Therefore, the remaining “lienable fund” is $3,810.00.

Scott argues that while the contract price was $45,000.00 for the excavation, foundation and septic system, CRC only provided the excavation and foundation and never provided the septic system.   The defendants argue that they paid $39,190.00 to CRC under the contract and an additional $11,500.00 to Franks Septic and Excavating for the septic system, for a total of $50,690.00.   The defendants argue that they paid more to complete the project than the contract price with CRC. Thus the defendants claim that there is no lienable fund to satisfy Haynes' claims.   See W.B. Glenney Co. v. Bianco, supra 27 Conn.App. 201.   However, the defendants' argument ignores the fact that Haynes delivered the extra concrete to the property at a contract price of $13,000.00.   Accordingly, the lienable fund as described above does exist in the amount of $3,810.00 which is the difference between the amount paid by Scott, $39,190.00, and the amount due under the contract for the completed work ($43,000.00).

The defendants also argue that the CRC contract is unenforceable under the Home Improvement Act, General Statutes § 20–429a.   The major flaw in the defendants' argument is that the contract in question here was not an agreement between a contractor and an owner for the performance of a home improvement.   The construction contract between Scott and CRC (DX.A) was for the construction of a new home.   Thus, CRC's status was that of new home construction rather than home improvement contractor.   See M.J.M. Landscaping, Inc. v. Lorant, 268 Conn. 429 (2004).   Moreover, it would be unfair and inequitable to disallow Haynes' claim as a subcontractor merely because CRC's contract violated the Home Improvement Act. Haynes had nothing to do with the creation of the CRC's owner's contract.   See Probuild East LLC v. Poffenberger, judicial district of New Haven, Docket No. CV–09 6004714 (June 25, 2010, Corradino, J.T.R.).

Based on the foregoing, the court finds a lienable fund of $3,810.00.   The plaintiff's mechanic's lien is valid and enforceable and thus judgment will enter for the plaintiff on count one in the reduced amount of $3,810.00,

Count two sounds in unjust enrichment as an alternate theory of recovery.   Haynes is entitled to proceed on unjust enrichment as an alternate theory under our statutory and relevant case law.  M.D. Drilling and Blasting, Inc. v. M.L.S. Construction, LLC, 96 Conn.App. 798, 803 (2006).   The elements of the claim for unjust enrichment are well established:  1) the defendant received a benefit;  2) the defendant unjustly did not pay the plaintiff for the benefit;  and 3) the plaintiff suffered a detriment by the failure of payment by the defendant.  Polverari v. Peatt, 29 Conn.App. 191, 200–01, cert. denied., 224 Conn. 912 (1992);  Bolmer v. Kocet, 6 Conn.App. 595, 612–13 (1986).

“A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another ․ With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard ․” New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451–52 (2009).

In the present case, Scott received the benefit of the concrete delivered by Haynes which formed the footings and foundation on which his home stands.   Haynes suffered a detriment by the delivery of the concrete to the defendants since Haynes was not paid in full.   Finally, the defendants unjustly did not pay Haynes in full for the concrete deliveries.

Accordingly, based on the facts presented the court will find for the plaintiff on Count Two of the complaint, unjust enrichment, in the amount of $3,810.00.

CONCLUSION

Based on all of the foregoing, the court finds for the plaintiff, Haynes Materials Company, on the two counts of the complaint.   The court concludes that the mechanic's lien should be enforced in the reduced amount of $3,810.00.

HARTMERE,J.

FOOTNOTES

FN1. Hereinafter defendants exhibits will be referred to as (“DX_”);  plaintiffs exhibits will be referred to as (“PX_”)..  FN1. Hereinafter defendants exhibits will be referred to as (“DX_”);  plaintiffs exhibits will be referred to as (“PX_”).

Hartmere, Michael, J.