West Haven Lumber v. Geoffrey Hamlin et al. (2011)

MEMORANDUM OF DECISION RE APPLICATION TO DISCHARGE MECHANIC'S LIEN (# 213.00)

This action was commenced in 2006 by the plaintiff West Haven Lumber (West Haven) seeking, among other relief, to foreclose a mechanic's lien on residential property owned by the defendants Hamlin and his spouse, Kristan Peters–Hamlin, arising out of the provision of lumber by West Haven in connection with a construction and remodeling project on the Hamlin property.   West Haven alleges it is a subcontractor on the project and that it is owed slightly over $50,000.00 for lumber supplies.

The case is scheduled for trial on April 19, 2011.   Although the defendants were advised that their burden of proof was higher than what they might encounter in a trial, they insisted on going forward with an application to discharge the mechanic's lien, and the application was heard on February 28, 2011 and additional briefing was received from the parties through March 11, 2011.

General Statutes § 49–33 provides for a mechanic's lien in favor suppliers of materials for the construction or repair of buildings if such materials are not paid for.   The lien is on the land and buildings for which the materials were supplied.   In accordance with General Statutes § 49–35a, the real estate owner(s) may apply to discharge or reduce the lien.   At the hearing of such an application the lienor is required to establish probable cause that its lien is valid;  thereupon, the lienee must prove by “clear and convincing” evidence that the lien should not be sustained or reduced.  General Statutes § 49–35b(a)(b).  In this case, the defendants waived the requirement that West Haven establish probable cause.   Therefore, probable cause was established, and the hearing moved directly to the defendants' case.

Mr. Hamlin was the only witness for the defendants.   He testified, credibly, that in 2006 the defendants contracted with Fred J. Buonfiglio of FJB contractors that the latter would complete the construction and remodeling project for the defendants for the amount of $768,000.00;  that the defendants paid FJB in accordance with the terms of the contract;  that well over $200,000.00 was paid to FJB by the middle of July 2006;  that FJB did not finish the contract and walked off the job in August 2006;  that the defendants had to pay several hundred thousand dollars more than the contract price to finish the project;  and that several significant portions of the job were negligently done by FJB and had to be reworked.   The documentary evidence supports this testimony.   See Exhibits 1 and 2 (original and superseding contracts with FJB);  Exhibits 4 through 14 (checks to FJB Contractors);  Exhibits 15 and 16 (check ledgers and bank records showing total payments);  Exhibit 18 (building inspector notes indicating certain elements failed inspection).

The plaintiffs presented little, if any, evidence to contradict or otherwise dispute the defendants' evidence.   In particular, the plaintiff does not dispute that FJB walked off the job and does not dispute the payments made to FJB. The plaintiff did dispute some relatively small payments made allegedly to complete the project.

General Statutes § 49–33(f) states that a subcontractor, such as West Haven, is subrogated to the rights of the general contractor.   This was reiterated in Seaman v. Climate Control Corp., 181 Conn. 592 (1980), in which the Connecticut Supreme Court, interpreting Section 49–33(f), said:  “in this state, a subcontractor's right to a mechanic's lien is said to flow from his equitable entitlement to the lien which would otherwise attach in favor of the general contractor ․ (citations omitted.)   Subrogation is consistent with and an integral part of, our statutory provisions limiting the totality of mechanic's liens to the unpaid contract debt owed by the owner to the general contractor.”  Id., 601–02.

In this case the court finds by clear and convincing evidence there is no unpaid contract debt owed to FJB Contractors.   This finding is based on the payments made to FJB before it defaulted on its contract and the provisions of the contracts between FJB and the defendant.   The contracts call for FJB to return one-half of the monies it received if it defaulted on its contract.   Exhibit 2, page 8, ¶ 15;  Exhibit 1 page 7, ¶ 15.   Similarly, FJB contracted to pay all subcontractors and remove all liens if the defendant paid his obligations under the contract.   Therefore, the more than $200,000.00 paid plus FJB's obligation to return monies because of its default, and the obligation to remove all liens extinguishes any possible debt owed to FJB by the defendants.

In a case cited and quoted by West Haven, the Connecticut Supreme Court stated:

If ․ a general contractor receives progress payments that are not turned over to those who have done the work represented by the progress payments, and ultimately defaults entirely, the owner making such payments and completing such a job is protected as long as the owner acts in good faith and reasonably, as defined by the statutes.   In determining whether the owner has met the statutory requirements of good faith and reasonableness, the trial court is making a finding of fact.

Rene Dry Wall Co. v. Strawberry Hill Associates, 182 Conn. 568, 573 (1980).   This court finds that the evidence is clear and convincing that FJB defaulted on the contract, and the defendant's payments to FJB were made in good faith and reasonably.   Hamlin testified credibly that he had no knowledge that subcontractors were not being paid until August 2006, well after the last payment to FJB, and there was no evidence to the contrary.   Further, there was no evidence of collusion with FJB or misrepresentations by the defendants to West Haven.   See Rene Dry Wall, supra, 182 Conn. 574.

Finally, the court finds by clear and convincing evidence that the lien should not attach after the calculations called for by General Statutes § 49–33(f) are completed.

West Haven makes the argument that since the framing phase of the project was not to be completed until July the payment for framing was made before it was due, and therefore it is not barred from asserting its lien.   This argument, although not stated, apparently relies on General Statutes § 49–36(c).  However, the argument does not comport with the evidence.   Hamlin testified that a payment of $60,000.00 (Ex. 4) was made in April 2006 for supplies, including lumber, as required by the contract.   Therefore, the payment was not made prematurely.   West Haven was not a framer but a supplier, and its own Certificates of Lien states it began supplying lumber on May 20, 2006.

It should be noted that this court has not relied on an affidavit of Buonfiglio submitted by the defendants as Exhibit 3. This affidavit is not admissible.   While the contents of the affidavit qualify as admissions against Buonfiglio's pecuniary interest, and there was some evidence that the affiant is presently in Texas, the evidence was not sufficient for the court to find that Buonfiglio was unavailable to testify so as to qualify the document for the exception to the hearsay rule set forth in Connecticut Code of Evidence, § 8–6(3).

Based on the foregoing, the court finds that defendants have established clear and convincing evidence that the West Haven lien should be, and hereby is, discharged.

SO ORDERED.

TAGGART D.ADAMS

SUPERIOR COURT JUDGE

Adams, Taggart D., J.