Rita Severns v. Wayne Kulas (2011)

MEMORANDUM OF DECISION MOTIONS FOR SUMMARY JUDGMENT

The plaintiff, Rita Severns, initiated this lawsuit against the defendant, Wayne Kulas, on October 2, 2009, after he refused to return a deposit on a residential property which she initially sought to purchase.   The one-count complaint alleges breach of contract seeking return of a $5,000 deposit and payment of attorneys fees and costs.   The allegations include the following:  On September 4, 2009, the plaintiff, as buyer, and the defendant, as seller, entered into a contract for the sale of 20 Preston Road, Windsor Locks.   Paragraph seventeen of the contract provided that a full and complete inspection of the property be conducted, and, if the results were unsatisfactory and the parties could not reach a mutually satisfactory agreement, the buyer had the right to terminate the contract.   The plaintiff alleges that the property was inspected on September 19, 2009, and the inspection revealed that the home was not structurally sound and that the mechanical, electrical and plumbing systems were not in good repair.   It was also revealed that the home lacked necessary building permits.   On September 21, 2009, the inspection report was sent to the defendant's real estate agent.   From September 21, 2009 through September 25, 2009, discussions took place between the agents and attorneys for the parties.   On September 23, 2009, the plaintiff sent to the defendant's attorney and real estate agent the following:  notice of unsatisfactory inspection, notice of inability to reach a mutually satisfactory agreement regarding the unsatisfactory inspection report and notice of termination.   On September 24, 2009, the defendant attempted to revive discussions with suggestions of repairs that could be done, but on September 25, 2009, the plaintiff sent the defendant a letter reaffirming the termination.   The contract further provided that if the buyer terminated the contract pursuant to paragraph seventeen, she was entitled to the return of a $5,000 deposit that was paid to the defendant.   The plaintiff alleges that the defendant has not returned the deposit in breach of their contract.

On December 17, 2009, the defendant filed an answer and counterclaim.   In his answer, the defendant denied breaching the contract.   In his counterclaim, the defendant asserts three counts, breach of contract, breach of the implied covenant of good faith and fair dealing and fraud on the part of the plaintiff.   Specifically, the defendant alleges that the plaintiff breached the contract by unilaterally terminating the contract without attempting to reach a mutually satisfactory agreement regarding the inspection.   The counterclaim further states that the plaintiff, through her agent, communicated on September 6, 2009 that she thought the contract price was too high and asked to be let out of the contract.   The seller responded by denying this request, but indicated that a contract price modification could be considered if the purchase price was five thousand dollars higher than the appraised value of the home.   The buyer, through her agent, responded by indicating that because she was not let out of the contract, she intended to use the inspection clause to get out of the contract no matter what the inspection revealed.   Thus, the defendant claims that the buyer's termination of the contract after the inspection was in bad faith.   In the final count, the defendant alleges that the buyer entered into the contract solely to prevent the seller from showing the property or accepting offers from another buyer, and thus committed fraud.

The motions that are presently before the court are the parties' cross motions for summary judgment.   On September 30, 2010, the plaintiff filed a motion for summary judgment on the ground that there is no issue of material fact and, as a matter of law, the defendant breached the contract.   The motion was supported by a memorandum of law, and the following exhibits:  the defendant's responses to requests for admissions;  the real estate contract;  the home inspection report;  a letter from the plaintiff's counsel addressed to the defendant's counsel, dated September 23, 2009;  the plaintiff's notice of termination;  a letter from the plaintiff's counsel addressed to the defendant's counsel, dated September 25, 2009 and the affidavit of the plaintiff.   The defendant filed an objection to the motion on December 14, 2010, in which he argues that it was the plaintiff who breached the contract, not the defendant.

On November 2, 2010, the defendant filed a motion for summary judgment, supported by a memorandum of law.   The defendant based his motion on the ground that there was no dispute of material fact and, as a matter of law, the plaintiff breached the contract and the implied covenant of good faith and fair dealing and committed fraud.   In support of this motion the defendant submitted the following exhibits:  the real estate contract;  the home inspection report;  the aforementioned September 23, 2009 letter sent from the plaintiff's counsel to the defendant's counsel;  the plaintiff's notice of termination;  a letter dated September 24, 2009 from the defendant's counsel to the plaintiff and the plaintiff's counsel;  the aforementioned September 25, 2009 letter sent from the plaintiff's counsel to the defendant's counsel;  a Greater Hartford Association of Realtors (GHAR) property inclusions/exclusions form filled out by the parties;  the extension addendum to the contract regarding the inspection date;  a blank GHAR notice of unsatisfactory inspection form;  the affidavit of Jeffrey Angell, realtor for the defendant;  printed emails purported to have been sent between the plaintiff and her real estate agent, Michelle Lizee;  and the plaintiff's responses to interrogatories.   On December 1, 2010, the plaintiff filed an objection to the defendant's motion in which she contends that material issues of fact exist as to the defendant's claims.   Attached to the objection is a second affidavit signed by the plaintiff.   On December 14, 2010, the defendant filed a reply to the plaintiff's objection, which included a second signed affidavit by Jeffrey Angell, purporting to authenticate the blank GHAR notice of unsatisfactory inspection form.   The motions were heard at short calendar on January 10, 2011.

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party ․ The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law.”  (Internal quotation marks omitted.)  Brooks v. Sweeney, 299 Conn. 196, 210, 9 A.3d 347 (2010).

I

THE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

In her motion for summary judgment, the plaintiff argues that there are no genuine issues of material fact as to her claim for breach of contract and she is entitled to judgment as a matter of law.  “The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.”  (Internal quotation marks omitted.)  Keller v. Beckenstein, 117 Conn.App. 550, 558, 979 A.2d 1055, cert. denied, 294 Conn. 913, 983 A.2d 274 (2009).   In this case, there is no dispute that a contract was formed.   Rather the dispute centers on the meaning of the terms contained therein.

Specifically at issue here is the effect of the language of the contract that was signed by the parties on September 4, 2009.   That contract states, at paragraph seventeen, “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 below and Seller and Buyer cannot reach a mutually satisfactory agreement regarding these matters, then Buyer may terminate this Contract by giving Seller written notice of termination no later than three days after the Inspection Contingency Date ․ If Buyer terminates this Contract pursuant to buyer's rights under this paragraph 17, Buyer shall receive all deposited sums and obligations of the parties under this Contract shall end, except with respect to obligations under this paragraph 17.”   The “terms set forth below” are as follows:  “A HOME INSPECTION performed by an engineer licensed by the State of Connecticut or a home inspection service licensed by the State of Connecticut indicating that the building and other improvements located on the Property are structurally sound and that the mechanical, electrical and plumbing systems of any of the buildings are in good repair.”   It is undisputed that the parties signed an extension addendum to the contract in which they agreed to an Inspection Contingency Date of September 24, 2009.   The contract further provides, at paragraph twelve, that “[t]his Contract contains the entire agreement between Buyer and Seller concerning this transaction, and supercedes any and all previous written or oral agreements concerning the property.”

The plaintiff argues that based on the plain language of the contract and the undisputed facts she was in compliance with the contract when she exercised her right to terminate after an unsatisfactory inspection.   In an affidavit submitted with her motion, she states that, on September 19, 2009, she hired an inspector to inspect the property.   She further states that, on September 21, 2009 the home inspection report was sent to the defendant's real estate agent, and, on September 23, 2009, the inspection report was sent to the defendant's attorney and again to his real estate agent.   She further states that on September 23, 2009 she sent a notice of unsatisfactory home inspection and notice of the parties' inability to reach a mutually satisfactory agreement regarding the unsatisfactory home inspection to the defendant's attorney and real estate agent.   Both parties have provided the correspondence referred to by the plaintiff in her affidavit as exhibits.   The plaintiff argues that the foregoing actions were sufficient to terminate the contract, and therefore, the defendant's failure to return the $5,000 deposit was a breach of the contract.

The defendant counters that the plaintiff breached the contract by unilaterally terminating it, and consequently, he is not required to return her $5,000 deposit.   The defendant does not dispute that the plaintiff sent him a notice of unsatisfactory inspection, notice of inability to reach a mutually satisfactory agreement regarding the unsatisfactory inspection report and notice of termination.   He argues, however, that the plaintiff was required to do more before terminating the contract.   He has provided, as an exhibit, a letter sent to the plaintiff after her notice of unsatisfactory home inspection and notice of the parties' inability to reach a mutually satisfactory agreement regarding the unsatisfactory home inspection, in which his counsel informed her that they would not accept such a unilateral termination of the contract.   The defendant contends that the plaintiff was required to use the GHAR notice of unsatisfactory inspection form to notify him of problems revealed by the inspection and give him the opportunity to agree to remedy any concerns raised by the inspection.   If, after that exchange, a mutually satisfactory agreement could not be reached, then the plaintiff would have been within her rights to terminate the contract.   Since this did not occur, the defendant claims that the plaintiff unilaterally terminated the contract in violation of its terms.

The court first considers the effect of the contract language.  “Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact ․ [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law.”  (Internal quotation marks omitted.)   Garcia v. Hartford, 292 Conn. 334, 341, 972 A.2d 706 (2009).  “The intent of the parties as expressed in a contract is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction ․ [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ․ the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract ․ Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms.   A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity ․ Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms ․ [T]he mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous.”  (Internal quotation marks omitted.)   Association Resources, Inc. v. Wall, 298 Conn. 145, 183, 2 A.3d 873 (2010).

In this case, the contract language at issue is definitive and unambiguous thus the court may rule on its meaning based on the terms contained within the four corners of the agreement.   The contract states that if the inspection is unsatisfactory in that it reveals that the home is not structurally sound and that the mechanical, electrical and plumbing systems of any of the buildings are not in good repair, the buyer may terminate the contract if no mutually satisfactory agreement is reached to remedy these matters and the buyer then notifies the seller within the appropriate time period.   There is nothing in the contract which indicates that any negotiation is required;  nor is there any requirement that a particular form be used by the buyer to notify the seller of an unsatisfactory home inspection.   The defendant does not dispute that the inspection report revealed problems with the property;  nor does he dispute that the plaintiff informed him that the inspection was unsatisfactory and sent him timely notice of inability to reach a mutually satisfactory agreement regarding the unsatisfactory inspection report.   The defendant's subjective view that the plaintiff should have afforded him an opportunity to remedy the problems identified as a result of the inspection or that the plaintiff should have used a GHAR form to notify him of problems with the inspection is not enough to overcome the plain meaning of the terms of the contract.

Accordingly, based on the plain language of the contract and the undisputed facts of this case, it is apparent that the plaintiff was within her rights to terminate the contract and did so in accordance with its terms.¹  Because she rightfully exercised her rights of termination under paragraph seventeen of the contract, the plaintiff is entitled to a refund of her deposit from the seller.   There is no dispute that the plaintiff paid a $5,000 deposit to the defendant and the defendant has not returned the deposit.   Therefore, the defendant has breached the contract by failing to return the $5,000 deposit.   For these reasons, the plaintiff's motion for summary judgment must be granted.

II

THE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

The court's ruling as to the plaintiff's motion for summary judgment makes the denial of the defendant's motion for summary judgment a foregone conclusion.   As noted above, the plaintiff was not in breach when she terminated the contract.   Therefore, the defendant's motion for summary judgment on his breach of contract claim necessarily fails as must the defendant's claim for breach of the implied covenant of good faith and fair dealing.  “To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith.”  (Internal quotation marks omitted.)  Renaissance Management Co. v. Connecticut Housing Finance Authority, 281 Conn. 227, 240, 915 A.2d 290 (2007).   Because the plaintiff acted within her rights, there was no benefit denied to the defendant which he could have reasonably expected to receive.

As to the defendant's claim for fraud, his counsel has conceded the motion's futility on that claim.  “Fraud consists [of] deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed ․ The elements of a fraud action are:  (1) a false representation was made as a statement of fact;  (2) the statement was untrue and known to be so by its maker;  (3) the statement was made with the intent of inducing reliance thereon;  and (4) the other party relied on the statement to his detriment ․ Additionally, [t]he party asserting such a cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which higher standard we have described as clear and satisfactory or clear, precise and unequivocal ․ The determination of what acts constitute fraud is a question of fact.”  (Internal quotation marks omitted.)  Reid v. Landsberger, 123 Conn.App. 260, 281, 1 A.3d 1149, cert. denied, 298 Conn. 933 (2010).   Since counsel for the defendant conceded at the short calendar hearing that he could not establish clear and convincing evidence on this claim, the defendant's claim of fraud also fails.

CONCLUSION

For all the foregoing reasons, the plaintiff's motion for summary judgment is hereby granted and the defendant's motion for summary judgment on the counterclaim is hereby denied.   Since the plaintiff has made a claim for attorneys fees pursuant to paragraph twelve of the real estate contract, which allows for such fees in the event of breach, the plaintiff is hereby ordered to file a motion for attorneys fees and an affidavit in support thereof within thirty (30) days of this order pursuant to Practice Book § 11–21.

Peck, J.

FOOTNOTES

FN1. The defendant cites Donaroma v. Home Sweet Home Realty, LLC, Superior Court, judicial district of New Britain, Docket No. CV 07 4014589 (October 22, 2008, Tanzer, J.) to support his contention that proper protocol required the buyer to allow the seller an offer to remedy, and use the GHAR form to do so.   That case is unpersuasive.   While the buyer therein used the GHAR form and afforded the seller the opportunity to agree to remedy the problems, there is nothing in that decision to support the defendant's contention that he was required to do so.   Likewise, there is no indication that the plaintiff in the present case was required to do so either..  FN1. The defendant cites Donaroma v. Home Sweet Home Realty, LLC, Superior Court, judicial district of New Britain, Docket No. CV 07 4014589 (October 22, 2008, Tanzer, J.) to support his contention that proper protocol required the buyer to allow the seller an offer to remedy, and use the GHAR form to do so.   That case is unpersuasive.   While the buyer therein used the GHAR form and afforded the seller the opportunity to agree to remedy the problems, there is nothing in that decision to support the defendant's contention that he was required to do so.   Likewise, there is no indication that the plaintiff in the present case was required to do so either.

Peck, A. Susan, J.