Nancy Murillo v. LLC (2011)

MEMORANDUM OF DECISION RE OBJECTION TO FACT FINDER'S REPORT

This case arises out of an agreement between the plaintiff, Nancy Murillo, and the defendant, John's Gutter Cleaning, LLC, for the defendant to demolish an existing dormer and construct a new dormer on the plaintiff's home.   On January 11, 2010, a hearing was held before fact finder David M. Moore, Esq. At the hearing the plaintiff, the defendant LLC and its member, Johnny E. Rivas, were represented by counsel.   Presently before the court is the defendant's objection to the fact finder's report.

The report includes the following relevant findings of fact.   On January 4, 2007, the parties signed a written contract for the defendant to perform home improvement work on the plaintiff's home, conforming to certain architectural drawings, for the consideration of twenty-five thousand dollars ($25,000).   The contract contained an implicit starting date of January 4, 2007 and a completion date of March 5, 2007.   The contract also contained an express promise that the defendant would complete the work in a “substantial workmanlike manner.”   The contract did not contain an owner's right of cancellation, which is required in a home improvement contract by General Statues § 20–429(a)(6).¹  On January 10, 2007,² the defendant obtained a building permit from the Town of West Hartford.   In early February 2007, revisions to the building permit were sought because the defendant had not followed the specifications in the architectural drawings or the building permit.   On February 13, 2007, the town issued a letter to Johnny Rivas, indicating that there were specific tasks that the defendant needed to address before continuing construction.   During the course of their business relationship, the plaintiff made three payments to the defendant totaling fifteen thousand dollars ($15,000).   In March 2007, the defendant ceased working on the project.   On April 23, 2007, the town inspected the plaintiff's home and issued a letter and written report, which revealed that various components of the construction were undersized, fabricated incorrectly and did not comply with the plans.³

I

The Defendant's Untimely Filing Does Not Preclude This Court from Issuing a Decision

Practice Book § 23–57, which provides, in pertinent part:  “(a) A party may file objections to the acceptance of a finding of facts ․ (b) Objections must be filed within fourteen days after the filing of the finding of facts.”   Our Appellate Court has considered “the effect of the failure of the defendant to file an objection to the acceptance of the finding of facts pursuant to Practice Book § [23–57].”  Gordon Hoyt Associates, Inc. v. Statewide Ins. Corp., 7 Conn.App. 115, 116, 507 A.2d 528 (1986).   The Court “[concluded] that where a party seeks to avoid a judgment to be rendered pursuant to a factfinder's finding of facts on the ground that the evidence upon which those facts found is insufficient, he must timely file a written objection pursuant to Practice Book § [23–57] ․ The purpose of Practice Book § [23–57] is to provide the adverse party and the court with adequate advance notice of the basis of the objection to the finding, so that an informed decision may be made ․ Since the act of rendering judgment is that of the court, and not that of the factfinder, the court is free, upon ‘review of the finding of facts;’ Practice Book § [23–58]; ⁴  to take any of the other five actions listed in that section which it deems appropriate, where there is a clear indication in the record before it that judgment is inappropriate.”  Id., 117–18.

In the present case, the fact finder filed his report on February 24, 2010.   The defendant did not file its objection until March 17, 2010, twenty-one calendar days (and fifteen business days) ⁵ later.   The plaintiff did not raise the issue of the defendant's late filing, and instead filed a reply memorandum.   Therefore, the defendant's objection is sufficient to provide the plaintiff and this court “with adequate advance notice of the basis of the objection to the finding, so that an informed decision may be made”;  id., 117;  and this court may take any action it deems appropriate, pursuant to § 23–58(6).   Further, the late filing of an objection to a fact finder report is a procedural defect which may be waived by the failure of the opposing party to raise it.   See Rowan Construction Corp. v. Hassane, 213 Conn. 337, 340–42, 567 A.2d 1210 (1990).

II

The Applicable Standard of Review is the “Clearly Erroneous” Standard

“Attorney fact finders are empowered to hear and decide issues of fact on contract actions pending in the Superior Court ․ On appeal, [o]ur function ․ is not to examine the record to see if the trier of fact could have reached a contrary conclusion ․ Rather, it is the function of this court to determine whether the decision of the trial court is clearly erroneous ․ This involves a two-part function:  where the legal conclusions of the court are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts set out in the memorandum of decision;  where the factual basis of the court's decision is challenged we must determine whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.”  (Internal quotation marks omitted.)  Data–Flow Technologies, LLC v. Harte Nissan, Inc., 111 Conn.App. 118, 125–26, 958 A.2d 195 (2008).

III

The Recommended Compensatory Damage Award is Clearly Erroneous

In the defendant's objection, it argues that the findings in paragraph fourteen were not based on the evidence.   Specifically, it argues that the factual finding that the project is incomplete is erroneous;  and the recommendation that the defendant is liable for damages is unfounded because there is no finding as to the value of the work remaining incomplete.

In her reply memorandum, the plaintiff argues that the fact finder's conclusion that the work is incomplete was not clearly erroneous because Rivas testified that he used undersized materials in framing the addition to the plaintiff's home.   Also, the plaintiff produced evidence, in the form of a contractor's estimate, showing that the cost of correcting the work was the full value of the original contract.

Paragraph fourteen of the fact finder's report states:  “it is not clear from the testimony of the parties that the work has been completed, or whether there is more to be done, as there has been no Certificate of Occupancy presented at the hearing, nor was there any testimony as to the completion of the work.   It is implied that there is work still outstanding, and that the Plaintiff cannot pay for more work, at least not at this time.   See Defendant's exhibit A and the Plaintiff's testimony.   It is therefore found that the contracted work remains undone.”

These findings are inconsistent.   In making this finding, the fact finder relied, in part, on the testimony of the plaintiff.   The report also states, however, that there was no testimony as to the completion of the work.

“Under Connecticut practice, transcripts are not automatically prepared for the court file.   Someone must initiate the process by ordering a copy of the transcript from the Court Monitor and by making sure that a copy of the foregoing transcript becomes available to the judge deciding the case.   In a situation such as this, the burden would fall on the [defendant] as the objecting [party] who [has] the obligation to provide an adequate record for review.   See, Swerdloff v. Rubenstein, 81 Conn.App. 552, 555 (2004) [ (It is appellant's burden to provide adequate record for review) ].   See, also, Practice Book §§ 19–14 and 61–10.  (Appellate principles applicable to Superior Court review of fact-finders or attorney trial referees.  Elgar v. Elgar, 238 Conn. 839, 848 (1996)).”   Glenwood Management Corp. v. Bicks, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 01 0182683 (July 12, 2005, Jennings, Jr., J.).  “When a trial transcript is not furnished, it may be assumed that such a transcript is not ‘crucial’ to the objections to the fact finder's report.”   Covello v. New England Carting, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 04 0200112 (January 30, 2006, Lewis, J.T.R.), citing Beizer v. Goepfert, 28 Conn.App., 693, 706–07, 613 A.2d 1336, cert. denied, 224 Conn. 901, 615 A.2d 1044 (1922), cert. denied, 507 U.S. 973, 113 S.Ct. 1416, 122 L.Ed.2d 786 (1993) [ (There is no rule requiring fact finder or trial court reviewing factfinder's report to order transcript) ].   The parties' testimony is not before this court because the defendant did not submit a transcript of the fact finder's hearing, and we assume that the transcript is not crucial to the defendant's objections.  Covello v. New England Carting, Inc., supra, Superior Court, Docket No. CV 04 0200112.

In finding that the construction was incomplete, the fact finder also relied on the defendant's exhibit A, which consists of the plaintiff's answers to interrogatories.   The answers are dated November 5, 2009, and contain the plaintiff's assertion that “to date” the defendant owes her eight thousand dollars ($8,000) as reimbursement for payments made to “complete/correct work left unfinished and/or completed incorrectly by the defendant.”   Neither this assertion nor any other evidence in the record provides a factual basis for the conclusion that the project was still incomplete at the time of the hearing.   Additionally, as previously noted, the report states that there was no testimony as to the completion of the work.   Therefore, the factual finding that the work was incomplete at the time of the hearing is clearly erroneous.   This erroneous finding does not, however, negate the defendant's liability for his breach.

Next, we turn to the defendant's liability.   The parties' contract (the plaintiff's exhibit two) states that the work was to be done in accordance with certain sketches.   The following evidence provides adequate factual support for the conclusions that the construction work was not done in accordance with the sketches and the defendant breached the contract:  the letter from the town to Rivas denying a permit revision (the plaintiff's exhibit nine);  the letter from the town to the plaintiff setting out mistakes and omissions in the construction (the plaintiff's exhibit five);  and the town inspection report stating that the defendant's work was not done in accordance with the plans (the plaintiff's exhibit seven).   Thus, it is clear that the defendant breached the contract.

Our Supreme Court has explained the method of calculating damages based on breach of a construction contract.  “As a general rule, in awarding damages upon a breach of contract, the prevailing party is entitled to compensation which will place [it] in the same position [it] would have been in had the contract been properly performed ․ Such damages are measured as of the date of the breach ․ For a breach of a construction contract involving defective or unfinished construction, damages are measured by computing either (i) the reasonable cost of construction and completion in accordance with the contract, if this is possible and does not involve unreasonable economic waste;  or (ii) the difference between the value that the product contracted for would have had and the value of the performance that has been received by the plaintiff, if construction and completion in accordance with the contract would involve unreasonable economic waste.”  (Internal quotation marks omitted.)  Naples v. Keystone Building & Development Corp., 295 Conn. 214, 224, 990 A.2d 326 (2010).

“The injured party, however, is entitled to retain nothing in excess of that sum which compensates him for the loss of his bargain ․ Guarding against excessive compensation, the law of contract damages limits the injured party to damages based on his actual loss caused by the breach ․ The concept of actual loss accounts for the possibility that the breach itself may result in a saving of some cost that the injured party would have incurred if he had had to perform ․ In such circumstances, the amount of the cost saved will be credited in favor of the wrongdoer ․ that is, subtracted from the loss ․ caused by the breach in calculating [the injured party's] damages ․ It is on this ground that ․ when an owner receives a defective or incomplete building, any part of the price that is as yet unpaid is deducted from the cost of completion that is awarded to him ․ Otherwise, the owner would be placed in a better position than full performance would have put him, thereby doubly compensating him for the injury occasioned by the breach.”  (Internal quotation marks omitted.)  Hees v. Burke Construction, Inc., 290 Conn. 1, 8, 961 A.2d 373 (2009).

“The plaintiff has the burden of proving the extent of the damages suffered ․ Although the plaintiff need not provide such proof with [m]athematical exactitude ․ the plaintiff must nevertheless provide sufficient evidence for the trier to make a fair and reasonable estimate ․ [T]he determination of damages is a matter for the trier of fact.”  (Internal quotation marks omitted.)  Naples v. Keystone Building & Development Corp., supra, 295 Conn. 224–25.

In order to place the plaintiff in the same position she would have been in if the defendant had not breached the contract, she must be awarded the amount necessary for the construction project to be completed.  Naples v. Keystone Building & Development Corp., supra, 295 Conn. 224.   The evidence does not show, and the defendant does not contend, that this would result in unreasonable economic waste.   The plaintiff has submitted an estimate ⁶ from a third-party contractor (the plaintiff's exhibit eight) showing a cost of twenty-five thousand dollars ($25,000) to complete the project.   This is “sufficient evidence for the trier to make a fair and reasonable estimate”;  id.;   of the cost of completion.   Due to the defendant's breach, the plaintiff was relieved from her obligation of paying it an additional ten thousand dollars ($10,000).   The ten thousand dollar ($10,000) savings must be subtracted from the twenty-five thousand dollar ($25,000) loss to determine the plaintiff's actual loss of fifteen thousand dollars ($15,000).   See Hees v. Burke Construction, Inc., supra, 290 Conn. 8. This analysis reveals that the fact finder's recommended award of twenty-five thousand dollars ($25,000) in actual damages is clearly erroneous, and the defendant is liable to the plaintiff for fifteen thousand dollars ($15,000) to compensate her for her actual loss.

IV

The Finding of Reckless Indifference is Clearly Erroneous

The defendant also argues that there is a lack of evidence for the finding of reckless indifference in paragraph twenty-one of the fact finder's report.⁷  The plaintiff counters that the defendant's admission that he knowingly failed to follow the architectural plans and substituted undersized materials is sufficient evidence to support the finding of reckless indifference.

General Statutes § 20–427(c) provides in relevant part:  “A violation of any of the provisions of this chapter shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42–110b.”  “Our Supreme Court has stated on several occasions that ․ the failure to comply with the Home Improvement Act is a per se violation of CUTPA.”  (Internal quotation marks omitted.)  Scrivani v. Vallombroso, 99 Conn.App. 645, 652, 916 A.2d 827, cert. denied, 282 Conn. 904, 920 A.2d 309 (2007).

“The ․ basic requirement to justify an award of punitive or exemplary damages has been repeatedly described in terms of wanton and malicious injury, evil motive and violence ․ [P]unitive damages may be awarded only for outrageous conduct, that is, for acts done with a bad motive or with a reckless indifference to the interests of others.”  (Internal quotation marks omitted.)  Lydall, Inc. v. Ruschmeyer, 282 Conn. 209, 245, 919 A.2d 421 (2007).  “A contractor's failure to comply with § 20–429 does not warrant such opprobrium.”  New England Custom Concrete, LLC v. Carbone, 102 Conn.App. 652, 667, 927 A.2d 333 (2007).

In the present case, the fact finder based his legal conclusions that the defendant violated CUTPA and is liable for punitive damages on the defendant's violation of § 20–429(a)(6), which is a per se CUTPA violation;  the defendant's breach of its express promise to complete the project in a substantial workmanlike manner;  and the defendant's failure to conform the building to the architectural drawings.   This evidence is not sufficient to support a finding of “wanton and malicious injury, evil motive ․ violence ․ outrageous conduct ․ acts done with a bad motive or with a reckless indifference to the interests of others.”  Lydall, Inc. v. Ruschmeyer, supra, 282 Conn. 245.   The court concludes that the proven facts are insufficient to support the finding of reckless indifference to the plaintiff's rights.   Therefore, the legal conclusion that punitive damages are appropriate is clearly erroneous;  Data–Flow Technologies, LLC v. Harte Nissan, Inc., supra, 111 Conn.App. 125;  and punitive damages cannot be awarded.

V

Award of Attorneys Fees

In Connecticut, “we adhere to the ‘American rule,’ which provides that ‘attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception.’   “ (Internal quotation marks omitted.)  Trugreen Landcare, LLC v. Elm City Development & Construction Services, LLC, 101 Conn.App. 11, 14, 919 A.2d 1077 (2007).   The parties' contract does not contain a provision for attorneys fees.   Although CUTPA contains a statutory exception because it provides for reasonable attorneys fees in General Statutes § 42–110g(d),⁸ it would be improper to award attorneys fees on the basis of CUTPA violations that are unrelated to damages.  Scrivani v. Vallombroso, 102 Conn.App. 668, 670, 927 A.2d 920 (2007).  “[I]n order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has engaged in a prohibited act and that, ‘as a result of’ this act, the plaintiff suffered an injury.   The language ‘as a result of’ requires a showing that the prohibited act was the proximate cause of a harm to the plaintiff.”  (Internal quotation marks omitted.)  Scrivani v. Vallombroso, 99 Conn.App. 645, 652, 916 A.2d 827, cert. denied, 282 Conn. 904, 920 A.2d 309 (2007).   In Scrivani, our Appellate Court remanded the case and directed “the [Superior] [C]ourt to articulate whether in awarding attorneys fees and punitive damages under CUTPA, it considered the per se CUTPA violations on the basis of violations of the Home Improvement Act, in conjunction with the other CUTPA violations, and if so, to articulate the basis for its finding that the defendant's failure to comply with the Home Improvement Act contributed to the plaintiffs' harm.”  Id., 654–55.   Cf. Taylor v. King, Superior Court, judicial district of New London, Docket No. CV 07 5002674 (September 24, 2008, Peck, J.), rev'd in part on other grounds, 121 Conn.App. 105, 994 A.2d 330 (2010) (wherein the plaintiff proved, by preponderance of evidence, that he suffered ascertainable loss specifically as result of defendant's failure to obtain signed agreement and defendant's failure to document changes to contract in writing, as required by Home Improvement Act).

In Scrivani, on remand, the Superior Court articulated that the plaintiff's financial loss was caused by other CUTPA violations, not the per se violations.  Scrivani v. Vallombroso, Superior Court, judicial district of New Haven, Docket No. CV 00 0441476 (April 20, 2007, Hadden, Jr., J.), aff'd, 102 Conn.App. 668, 927 A.2d 920 (2007).   The Appellate Court concluded:  “Because the [Superior] [C]ourt did not base its award of punitive damages and attorneys fees on the per se CUTPA violations that were based on violations of the Home Improvement Act ․ the court did not improperly determine that the defendant violated CUTPA on the basis of violations of the Home Improvement Act that were unrelated to damages.”  Scrivani v. Vallombroso, supra, 102 Conn. 670.

In the present case, none of the evidence or factual findings show that the plaintiff's damages were caused by the defendant's failure to include notice of the homeowner's cancellation rights in the contract.   It is, therefore, legally and logically incorrect to award attorneys fees and costs based on the per se violation of CUTPA, pursuant to § 42–110g(d).  The finding that such an award is merited under the circumstances is therefore clearly erroneous and the plaintiff is not entitled to them.

CONCLUSION

Accordingly, for all the foregoing reasons, the court hereby orders judgment in favor of the plaintiff for $15,000 as compensation for her actual loss.

Peck, J.

FOOTNOTES

FN1. General Statues § 20–429 provides, in pertinent part:  “(a) No home improvement contract shall be valid or enforceable against an owner unless it ․ (6) contains a notice of the owner's cancellation rights in accordance with the provisions of chapter 740 ․”.  FN1. General Statues § 20–429 provides, in pertinent part:  “(a) No home improvement contract shall be valid or enforceable against an owner unless it ․ (6) contains a notice of the owner's cancellation rights in accordance with the provisions of chapter 740 ․”

FN2. Although the fact finder's report states that the building permit was obtained on January 10, 2004, this appears to be a typographical error because the permit was signed on January 10, 2007..  FN2. Although the fact finder's report states that the building permit was obtained on January 10, 2004, this appears to be a typographical error because the permit was signed on January 10, 2007.

FN3. The fact finder also found that the plaintiff contracted with a new contractor to complete the project and is responsible for paying it twenty-five thousand dollars ($25,000), of which she has already paid eight thousand dollars ($8,000).   It is not necessary for the court to consider these findings in order to issue a decision on the defendant's objections..  FN3. The fact finder also found that the plaintiff contracted with a new contractor to complete the project and is responsible for paying it twenty-five thousand dollars ($25,000), of which she has already paid eight thousand dollars ($8,000).   It is not necessary for the court to consider these findings in order to issue a decision on the defendant's objections.

FN4. Practice Book § 23–58 provides, in pertinent part:  “(a) After review of the finding of facts and hearing on any objections thereto, the judicial authority may take the following action:  (1) render judgment in accordance with the finding of facts;  (2) reject the finding of facts and remand the case to the fact finder who originally heard the matter for a rehearing on all or part of the finding of facts;  (3) reject the finding of facts and remand the matter to another fact finder for rehearing;  (4) reject the finding of facts and revoke the reference;  (5) remand the case to the fact finder who originally heard the matter for a finding on an issue raised in an objection which was not addressed in the original finding of facts;  or (6) take any other action the judicial authority may deem appropriate.”.  FN4. Practice Book § 23–58 provides, in pertinent part:  “(a) After review of the finding of facts and hearing on any objections thereto, the judicial authority may take the following action:  (1) render judgment in accordance with the finding of facts;  (2) reject the finding of facts and remand the case to the fact finder who originally heard the matter for a rehearing on all or part of the finding of facts;  (3) reject the finding of facts and remand the matter to another fact finder for rehearing;  (4) reject the finding of facts and revoke the reference;  (5) remand the case to the fact finder who originally heard the matter for a finding on an issue raised in an objection which was not addressed in the original finding of facts;  or (6) take any other action the judicial authority may deem appropriate.”

FN5. “[W]hen our rules of practice measure an applicable time period in business days, they explicitly so provide.”  Finan v. Finan, 107 Conn.App. 369, 375, 945 A.2d 476, rev'd on other grounds, 287 Conn. 491, 949 A.2d 468 (2008)..  FN5. “[W]hen our rules of practice measure an applicable time period in business days, they explicitly so provide.”  Finan v. Finan, 107 Conn.App. 369, 375, 945 A.2d 476, rev'd on other grounds, 287 Conn. 491, 949 A.2d 468 (2008).

FN6. The plaintiff's exhibit eight contains the language “INVOICE # 101.”   Examination of the record reveals, however, that it likely is an estimate because the document contains no figures totaling the number of hours or rate for each portion of the project;  it is labeled “proposal” on the list of exhibits;  the plaintiff refers to it as an “estimate” in her brief;  and there is a factual finding that the plaintiff would have to pay a new contractor twenty-five thousand dollars ($25,000) to complete the work that had originally been contracted for.   In any case, exhibit eight is “sufficient evidence for the trier to make a fair and reasonable estimate;” Naples v. Keystone Building & Development Corp., 295 Conn. 214, 224, 990 A.2d 326 (2010);  of the cost of completing the project, and whether it is an invoice or an estimate is immaterial..  FN6. The plaintiff's exhibit eight contains the language “INVOICE # 101.”   Examination of the record reveals, however, that it likely is an estimate because the document contains no figures totaling the number of hours or rate for each portion of the project;  it is labeled “proposal” on the list of exhibits;  the plaintiff refers to it as an “estimate” in her brief;  and there is a factual finding that the plaintiff would have to pay a new contractor twenty-five thousand dollars ($25,000) to complete the work that had originally been contracted for.   In any case, exhibit eight is “sufficient evidence for the trier to make a fair and reasonable estimate;” Naples v. Keystone Building & Development Corp., 295 Conn. 214, 224, 990 A.2d 326 (2010);  of the cost of completing the project, and whether it is an invoice or an estimate is immaterial.

FN7. Paragraph twenty-one of the report states:  “Said violation of the Home Improvement act ( ․ [§ ]20–429), along with the express promise of work being completed in a substantial workmanlike manner having been violated, it is further found that the failure to conform to the specific sizes in the drawings that both parties admit were part of the contract is not only a breach of the underlying contract, such failure was made with reckless indifference to the Plaintiff's rights.   Such violations of the home improvement Contract act and breach of the contract itself violates public policy, and the reckless indifference to the Plaintiff's rights are all therefore a violation of ․ General Statutes [§ 42–110a], et seq. (the Connecticut Unfair Trade Practices Act) [CUTPA].”.  FN7. Paragraph twenty-one of the report states:  “Said violation of the Home Improvement act ( ․ [§ ]20–429), along with the express promise of work being completed in a substantial workmanlike manner having been violated, it is further found that the failure to conform to the specific sizes in the drawings that both parties admit were part of the contract is not only a breach of the underlying contract, such failure was made with reckless indifference to the Plaintiff's rights.   Such violations of the home improvement Contract act and breach of the contract itself violates public policy, and the reckless indifference to the Plaintiff's rights are all therefore a violation of ․ General Statutes [§ 42–110a], et seq. (the Connecticut Unfair Trade Practices Act) [CUTPA].”

FN8. General Statutes § 42–110g(d) provides, in pertinent part:  “In any action brought by a person under this section, the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery.”.  FN8. General Statutes § 42–110g(d) provides, in pertinent part:  “In any action brought by a person under this section, the court may award, to the plaintiff, in addition to the relief provided in this section, costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery.”

Peck, A. Susan, J.