Martin Orellana v. Domenico Chiera (2011)

MEMORANDUM OF DECISION

These consolidated actions arise out of a real estate closing and the subsequent renovation and development of a single-family home into a three-family home and/or aborted three-unit condominium.   In the first action, the purchaser/homeowner brings an action against the real estate broker who represented him in the purchase of the subject premises in three counts:  negligent misrepresentation, CUTPA and negligent infliction of emotional distress.   A fourth claim of “duress” was withdrawn at the conclusion of the trial.   The real estate broker, in addition to alleging special defenses of unclean hands and statute of limitations, counterclaims in breach of contract, unjust enrichment, quantum meruit, fraud, negligent bailment and negligent infliction of emotional distress.   In the second action, the real estate broker seeks to foreclose a mortgage encumbering the subject premises given by the purchaser/homeowner.   The homeowner imposes special defenses of duress, equitable estoppel, fraudulent inducement and unclean hands, and asserts a counterclaim based in CUTPA.   Special defenses of mistake, coercion and unconscionability were withdrawn at the conclusion of the trial.

FACTS

The court makes the following findings of fact.   Fifty-five-year-old Martin Orellana was born in Ecuador, immigrated to the United States at the age of thirty-five and has been living in New York and Connecticut continuously for over twenty years.   In his native Ecuador, he was raised on a farm and as an adult made a living as a tailor.   His highest grade of education completed was two years of high school in Ecuador.   He settled in Queens, New York where he earned a living over the next fourteen years both driving a taxi cab and working as a tailor.   Domenico Chiera, age fifty-two, was born in Italy.   He completed high school and worked for several years as a building contractor before immigrating to the United States at the age of twenty.   Over the succeeding thirty-two years, he held a variety of occupations.   He started out washing dishes and eventually became a restaurateur, owning his own business which he successfully operated until 1996.   He first became a licensed real estate agent in 1996 and a real estate broker in 1999.   In addition to his brokerage business, Chiera began investing in real estate, buying properties, renovating them and eventually selling them for a profit.   He holds no contractor licenses from the State of Connecticut.   Nonetheless he admits to having “coordinated” several projects in the past.

Orellana and Chiera met in the fall of 2003 through a common acquaintance.   Orellana, the sole parent of both a teenage son and a daughter, wanted to move his family out of New York to Danbury “for a better life.”   He had friends in Danbury and believed the move offered him that opportunity.   After speaking on the phone, the two men met for the first time at Chiera's home along with Orellana's son and daughter.   Some of the conversation was in English and some in Spanish.   Orellana acknowledged that Chiera's Spanish was very fluent.   Nonetheless some of the conversation occurred in English for the benefit of Orellana's son.   Chiera testified that Orellana's knowledge and use of English was good, but that Spanish was his first language and his preference.

As a result of that meeting, Chiera showed Orellana several homes, none to his liking.   Chiera said Orellana had champagne taste on a beer budget.   It is not clear if these were all multifamily homes or single-family.   At some point, Chiera called Orellana because a property known as 20 Virginia Avenue (premises), a single-family home, had come back on the market.   Orellana and his children looked at it and “fell in love with it.”   Orellana made a successful offer on the premises for $260,000, and the closing was consummated on November 26, 2003.   Orellana took out a purchase money mortgage in the amount of $234,000.

This is the point where Chiera's and Orellana's accounts of their relationship over the next four years begins to diverge.   Orellana contends that he wanted to purchase a two- or three-family house, live in one of the apartments and rent out the remaining apartments to defray the cost of his mortgage.   He contends that Chiera duped him into purchasing the premises by leading him to believe that he could add an additional two units onto the house, declare the property as a condominium, sell the two additional units and realize enough money to pay off his mortgage and have cash left over.   Orellana asserts that Chiera agreed to act as project manager for this endeavor, taking charge of obtaining all necessary permits, and agreed to finance the project.   All Chiera wanted in return was the listing agreement for the sale of the two additional units upon the project completion and no further compensation, despite the fact Orellana claimed Chiera told him it would cost $160,000 to construct the two units.   Chiera, of course, vigorously disputes this version of the events.   Chiera claims that he had discussions with Orellana as to the logistics of such a project prior to the closing, but disputes that he ever agreed to act as a project manager or financier at that time.   Further, Chiera claims that after the closing he introduced Orellana to an architect and agreed to act as his agent with the local planning and zoning authorities to help Orellana obtain the necessary permits;  that the building permit was issued in November 2004, almost a full year after Orellana closed on the property;  that Orellana had no financing in place to pay for the construction;  that Orellana begged Chiera for help;  that Chiera only then acquired a stake in the project by agreeing to advance the cost of the excavation and foundation work for the addition;  and that he continued to advance money and labor on behalf of Orellana's project with no clear agreement of how he would be compensated.   Chiera further contends that it was only in March of 2006 that he and Orellana agreed that he would continue to manage and finance the project for a 50/50 split of the profits after the units were sold.   The court finds that neither of these two accounts are entirely plausible or credible.

Orellana was represented at the closing by Gregg Brauneisen, an attorney recommended by Chiera.   Brauneisen was Chiera's personal attorney.   The closing took place against the backdrop of a very hot real estate market and an unusual set of circumstances peculiar to the zoning district in which the premises lie.   At the time of the closing, a number of single-family homes in this zone district had been expanded into three-unit dwellings, “condominiumized” and the units sold for fantastic profits.   Several of these projects had been completed and several were in progress at the time of the closing.   In fact, one such project in progress was located nearby at 10 Sixth Street and was owned by one Edgar Guatazaca, a friend of Orellana and a client of Chiera.

Orellana did not move into the premises after the closing but chose instead to rent the house and remain living and working in Queens.   Chiera found a tenant for him and acted in the role of property manager.   During the course of that next year, calendar year 2004, Chiera coordinated the installation of a new boiler and helped install two new oil tanks.   He arranged to have the basement cleaned out after it flooded and arranged for roof repairs.   In some cases he advanced payment and was later reimbursed by Orellana, in others he put Orellana in touch with the contractors themselves.   There was no testimony as to whether or not he was compensated for his efforts.   Over the course of that year, Chiera assisted Orellana in putting together the permit application for the project.   Chiera introduced Orellana to an architect, Melvin Evuen, who drafted the plans for the project.   Despite his denials it is clear that Chiera was acting as a construction manager.   In fact, in examining the building permit application filed with the City of Danbury, page two has a place for a signature of both “general contractor/construction manager” as well as “property owner.”   On the certified copy submitted into evidence the general contractor's name, address and signature are clearly whited out.   On the photocopied certified copy submitted into evidence it is not possible to read under the whiteout.   However, the court received testimony which it finds credible from Elena McGynn, a real estate agent, who said she handled the original document at the Danbury planning and zoning office and upon holding it up to the light was able to read the name, address and signature of Chiera beneath the whiteout.   The application package was submitted on August 24, 2004, and the building permit was issued on November 19, 2004.   As part of the package, Orellana authorized Chiera as his agent for the project.   The written authorization is dated October 28, 2004.   All costs to the architect were paid directly by Orellana.   Chiera paid the fees due the City of Danbury for the permits and was subsequently reimbursed by Orellana.

Over the course of 2004, Chiera and Orellana would become good friends.   Chiera made several trips to Queens to meet Orellana and discuss the building plans over dinner.   A photograph admitted as an exhibit shows the jovial pair posing for a picture after one such dinner meeting, the portly Mr. Chiera with his arm around the shoulders of the diminutive Mr. Orellana, construction plans tucked neatly under Orellana's arm.   Their relationship would soon come under strain.   By the time the permit was issued, a year had passed since the closing.   The tenants had made a mess of the house and Chiera recommended getting rid of them.   Cheira had wanted Orellana to have his financing in order at this point to commence construction of the two units, but Orellana claimed he could not obtain financing.   Chiera, believing that financing would be available to Orellana if they could get the project “out of the ground,” i.e., excavate and pour the footings and foundation walls, advanced the funds necessary to do the work, a sum he estimated to be $20,000 to $25,000.   The work on the foundation was completed during the winter of 2005/2006, but Orellana changed the plans.   He wanted to move into the now empty house and he wanted to renovate it immediately before moving in and before commencing construction of the two additional units above the foundation.   Chiera requested $70,000 for the renovation work and Orellana obtained a $75,000.00 equity line secured by a second mortgage to obtain the funds.   Commencing in early 2005 though the summer, Chiera oversaw the renovation of the existing house, including the addition of a third floor consisting of two bedrooms with ten-foot vaulted ceilings and one bathroom.   During this time work, on the two additional units was abandoned.   In addition to the $70,000, Orellana made two additional payments totaling $3,015.50.   The work was completed and Orellana and his family, including his new wife, moved into the now fully renovated five-bedroom home prior to September 2005.   It was around this time that Orellana began to request money from Chiera.   Between November 2005 and June 2006, Chiera advanced the total amount of $11,000 to Orellana as a loan.

Once the renovations were completed and Orellana and his family moved into the home, work recommenced on the two-unit addition.   However, the two men soon reached an impasse and work slowed to a crawl over the winter of 2005/2006.   Orellana couldn't understand why Chiera was not working on the two units, and Chiera could not understand why Orellana was not seeking the financing necessary to do the work.   Both men were feeling financial strain, Orellana because he was now carrying two mortgages with no rental income, and Chiera because he had been advancing construction costs on what he thought would only be a short-term basis but now turned out to be long-term.   Orellana claims that Chiera now told him the cost to construct the two units had increased to $254,000.   Finally a meeting was called at the office of attorney Brauneisen on March 28, 2006.   The meeting was attended by Orellana, Chiera, Brauneisen and Orellana's wife, Elena Carrera.   No one can agree on who called the meeting, the purpose of the meeting or exactly what transpired at the meeting.   According to Orellana, the meeting was called by Brauneisen.   Orellana contends that right from the beginning of construction he had been requesting both a written contract to memorialize his agreement with Chiera as well as copies of receipts for the work as it progressed.   Orellana said he believed the purpose of the meeting was to discuss the project and get receipts and other proof of the money that had gone into the project.   Chiera insists the meeting had been called by Orellana.   Chiera said that over the winter he refused to do any additional work or put any more of his own money into the project until he had an understanding that he was going to be “protected.”   Chiera claims that Brauneisen promised him he would “be made whole” and that the meeting was for that purpose.   At the meeting Orellana signed a promissory note to Chiera in the amount of $450,000 payable upon demand together with a mortgage deed to secure the note on the subject premises.   Chiera contends that the amount was arrived at between Orellana and Brauneisen, proposed to him and that he accepted it.   Orellana pleads ignorance, claiming variously that he didn't understand the import of the note and deed, that he would not have agreed to it if he understood it was for $450,000, and that he questioned only the interest rate and was reassured by Chiera not to worry about interest.   He testified that no one explained the note and deed to him and that even if they had he wouldn't have been able to understand them because he neither speaks nor reads English.   Chiera insists that Orellana has a very good understanding of written and spoken English and that he absolutely understood what had transpired.   Chiera said there was no discussion at the table, that Orellana signed the deed freely and voluntarily while his wife berated him for doing so.   Brauneisen for his part claims he can't remember who called the meeting or who directed him to draft the note and deed.   He was emphatic that Orellana had the opportunity to read the document before signing it and that Orellana acknowledged his signature as his free act and deed.   Chiera believed Brauneisen to be representing Orellana's interest and Orellana, Brauneisen's.   Brauneisen testified that he was representing both their interests though, once again, he had no recollection of who told him to draft the note and what terms to put in it.

With the meeting behind them, Chiera recommenced work on the premises, purchasing the materials, coordinating the workmen and providing labor himself.   The two additional units were completed by January 2007, and a final certificate of occupancy was issued on May 24, 2007.   Over the course of the three years, he was involved with the project.   Chiera paid $227,688.37 for materials and supplies in the project, including both the renovation of the existing house and the construction of the two additional units, and, as the court has already noted, advanced $11,000 to Orellana as a loan.   The court makes these findings based on several hundred pages of documentary evidence, including copies of invoices, receipts and checks, submitted at the trial and upon which Chiera was meticulously cross-examined.   The court notes that Chiera made no distinction between business and personal funds, commingling both in his real estate business account.   The entity through which Chiera conducts his real estate business, A New Realty, LLC, has never been made a party to either action.   Chiera was reimbursed a total of $73,015.50 by Orellana.   In addition to money advanced for materials, Chiera invested many hours of labor, digging footings and drainage ditches, tarring the foundation, cleaning up debris, sheet rocking, taping, painting, tiling, trimming and installing fixtures, as well as coordinating all of the other workmen.   He offered no evidence as to the value of his time.

By the time the construction was complete in January 2007, the relationship between these two former friends had broken down completely.   A further issue arose requiring Orellana to obtain a variance because the new addition violated the front yard setback and lot coverage.   Orellana blamed Chiera for the problem, but the evidence shows that the problem arose as a result of plans drawn up by the architect and upon which the parties relied.   Orellana took his business to a new attorney to solve the zoning problem.   A variance was granted and the certificate of occupancy for the two additional units was issued on May 24, 2007.   In the intervening years, Orellana and his family have continued to reside in the original unit of the premises, now a five-bedroom apartment.   Since the issuance of the certificate of occupancy almost four years ago, the two new units have been rented at $1,400 per month each and Orellana rents two bedrooms within his own apartment for as much as $500 per month each, producing as much as $3,800 total monthly rental income.   He has never sought condominium approval for the premises offering in explanation, “I don't know how to do that, the attorney said it's a long process.”   The original purchase money mortgage, recorded on December 1, 2003, remains in place as a valid first mortgage on the premises and is now held by Bank of America.   It has an approximate principal balance of $220,000.   Chiera's mortgage, recorded on March 29, 2006, in the amount of $450,000 holds second place.   The home equity loan which Orellana took in order to advance $70,000 to Chiera has been paid off and replaced with a mortgage to the defendant, Bank of America, in the amount of $120,000 which was recorded May 3, 2007 and holds third place in order of priority.   The parties have each submitted written appraisals and have stipulated to the fair market value of the subject premises as of March 18, 2011 in the amount of $460,000.   Further factual findings are set forth below when necessary to resolve the parties' specific claims.

DISCUSSION

ICREDIBILITY

“The fact-finding function is vested in the trial court with its unique opportunity to view the evidence presented in a totality of the circumstances, i.e., including its observations of the demeanor and conduct of the witnesses and parties.”  (Internal quotation marks omitted.)  Cavoli v. DeSimone, 88 Conn.App. 638, 646, 870 A.2d 1147, cert. denied, 274 Conn. 906 (2005).

“It is well established that in cases tried before courts, trial judges are the sole arbiters of the credibility of witnesses and it is they who determine the weight to be given specific testimony ․ it is the quintessential function of the factfinder to reject or accept certain evidence ․” (Citations omitted;  internal quotation marks omitted.)  In re Antonio M., 56 Conn.App. 534, 540, 744 A.2d 915 (2000).  “The sifting and weighing of evidence is peculiarly the function of the trier [of fact].”  Smith v. Smith, 183 Conn. 121, 123, 438 A.2d 842 (1981).  “[N]othing in our law is more elementary than that the trier [of fact] is the final judge of the credibility of witnesses and of the weight to be accorded to the testimony.”  (Citation omitted;  internal quotation marks omitted.)  Toffolon v. Avon, 173 Conn. 525, 530, 378 A.2d 580 (1977).  “The trier is free to accept or reject, in whole or in part, the testimony offered by either party.”  Smith v. Smith, supra, 183 Conn. 123.   “That determination of credibility is a function of the trial court.”   Heritage Square, LLC v. Eoanou, 61 Conn.App. 329, 333, 764 A.2d 199 (2001).

“[T]he trier is free to juxtapose conflicting versions of events and determine which is more credible ․ it is the trier's exclusive province to weigh the conflicting evidence and determine the credibility of witnesses ․ the trier of fact may accept or reject the testimony of any witness ․ the trier can, as well, decide what-all, none, or some-of the witnesses' testimony to accept or reject.”  (Citations omitted;  internal quotation marks omitted.)  State v. Osborne, 41 Conn.App. 287, 291, 676 A.2d 399 (1996).  “The trial court's function as the finder is to draw whatever inferences from the evidence or facts established by the evidence it deems to be reasonable and logical.”   In re Christine F., 6 Conn.App. 360, 366, 505 A.2d 734, cert. denied 199 Conn. 808, 508 A.2d 734 (1986).

A key element in Orellana's claims, both in his complaint and in his special defenses to the foreclosure, is his assertion that he was taken advantage of because of his lack of understanding of written and spoken English.   Indeed at the trial Orellana testified through an interpreter.   His language difficulties were somewhat corroborated by his son, Eddy Orellana, who testified that his father sought out Chiera because he spoke Spanish and that Chiera and his father would communicate with a spoken mixture of Spanish and English.   In addition, Elena McGlynn, Orellana's new real estate agent after his breakup with Chiera, testified that Orellana sought out her because she was fluent in Spanish.   On the other hand, Orellana had been living in the United States for over fourteen years by the time he purchased the premises and had been working as a taxi driver and as a tailor, two occupations where he would have had daily contact with the general public and would have needed to be able to communicate with his passengers and his customers.   When queried on cross-examination as to how he communicated with his taxi passengers as to where to take them, Orellana's response that his passengers simply told him, “turn right and turn left,” is not credible.

Further, Chiera testified that, in his experience over the years, although Spanish is Orellana's first language, he reads and speaks English adequately.   Admittedly, Chiera is an interested party and his testimony on this point is somewhat suspect.   Somewhat more persuasive was the testimony of attorney Brauneisen.   He recalls meeting Orellana for the first time to discuss contracts prior to the purchase.   He made “small talk” with Orellana and they talked about the fact that Orellana was a taxi driver and that he was looking forward to moving with his family to Danbury.   Brauneisen reviewed the contracts with Orellana and answered Orellana's questions on specific issues.   All of this took place in English.   Brauneisen knows only a little Spanish and would not, and did not, attempt to communicate with Orellana in Spanish.   Brauneisen explained that there are no Spanish speaking attorneys in his office and, at that time, only one Spanish speaking staff member.   As a practical matter he would not have been able to take on representation of Orellana if he could not communicate with him in English.   Brauneisen recalls Chiera being present at the closing of the purchase of the premises but does not recall him having to translate or explain the closing documents to Orellana.   Brauneisen specifically recalls having a meeting with Orellana approximately a year after the closing when Orellana came to see him to discuss financial difficulties which he was having.   The only other person present was Orellana's teenage daughter and she did not translate.   Brauneisen was able to hold a conversation with Orellana.   Orellana was appropriately responsive to the questions and comments of Brauneisen and Brauneisen believed the two communicated without difficulty.   Between that meeting and the meeting of March 28, 2006, Brauneisen testified that he had several other meetings with both Chiera and Orellana and that there were no apparent difficulties with communication.

Equally or more important than the testimony of Brauneisen, or any other witness for that matter, is what the court was able to observe during the course of the trial.   Well into a long and arduous cross-examination, Orellana's professed inability to respond to questions about the exhibits in evidence because of a language barrier began to fade as fatigue set in and he let his guard down.   By the end of cross-examination he was able to quickly identify a town clerk certified copy of a deed as such, as well as read numbers and text on a promissory note and answer questions about the building permit application which would have necessitated an ability to read and understand the written application in front of him.   All of these documents were written in English.   Further, once Orellana left the stand, and was seated in the gallery of the courtroom behind the counsel tables, Orellana, his wife and another witness were actively engaged by the proceedings continuing before them, reacting to the testimony and speaking among themselves.   The following day when Chiera took the stand, Orellana and his wife, again seated in the gallery, reacted strongly to the testimony at times, nodding vigorously in agreement, shaking their heads in disagreement or disbelief and otherwise revealing their reactions with facial expressions.   It was apparent to this court that Orellana clearly understood the testimony as it unfolded.   The court finds that much of Orellana's professed ignorance of written and spoken English early in his testimony had been feigned.   Further there was no testimony that Orellana's knowledge of written and spoken English was any better or worse at the time of trial than it was at the time of the events subject of this instant suit.

As to Chiera, the court does not find credible his claims that he did not assume the role of general contractor or project manager until the actual construction began.   The court finds that he had assumed that role at least as early as the date the building permit was submitted.   The court also does not accept as credible that Chiera had no input into the amount of the promissory note and deed executed by Orellana at the meeting of March 28, 2006.   Further determinations as to the credibility of the parties are set forth below when necessary to resolve specific issues regarding the parties' claims.

II

PLAINTIFF'S CLAIMSNEGLIGENT MISREPRESENTATION AND CUTPAA. NEGLIGENT MISREPRESENTATION

At the heart of Orellana's negligent misrepresentation claim are the allegations that Chiera induced Orellana to purchase a single-family home and undertake to develop it into a three-unit condominium through the misrepresentations that Chiera was an experienced builder/developer;  that Chiera would act as general contractor/project manager;  that Chiera would act as financier for the project;  that Chiera would provide these services free of charge;  that Chiera desired nothing more for his trouble than the listing agreements on the two additional resulting condominium units;  and that as a result of his reliance on the representations made by Chiera, Orellana has sustained damages.  “This court has long recognized liability for negligent misrepresentation.   We have held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth ․ The governing principles are set forth in similar terms in § 552 of the Restatement Second of Torts [1979]:  One who, in the course of his business, profession or employment ․ supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.”  (Citations omitted;  internal quotation marks omitted.)  D'Ulisse–Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 217–18, 520 A.2d 217 (1987).   The court finds Orellana's claim based on negligent misrepresentation not proven.

The court does not find it credible that Chiera would invest his time, efforts and money to develop the property and forego any of the profits.   Chiera denies making such representations and the court finds his testimony credible.   During the trial, Chiera testified that if he wanted to develop the property, he had the resources and the means to do so without Orellana.   Orellana's decision to purchase the property and develop it was his own.   To put it colloquially, developing single-family homes into three-unit condominiums was the hottest game in town and Orellana wanted a piece of the action.   Further, once Orellana closed the purchase of the property he paid directly for the services of the architect and paid for the permit fees.   In fact, during calendar year 2004, Orellana invested $17,517.54 between architect's fees, permit fees and other costs out of his own pocket.   Chiera invested nothing.   Chiera acquired no financial stake in the project until almost a year after Orellana purchased the premises when the building permit had already been issued and Orellana had no funds to commence work on the footings and foundation.

The court also finds Orellana's claim of damages without merit.   Orellana claims as damages carrying costs he has paid over the years including mortgage interest, taxes and water bills.   The court notes that Orellana would have incurred these expenses whether he had purchased this property or any other.   The court also notes that Orellana is now the owner of an almost new, very large three-family home still worth in today's market $460,000.   The two townhouse style, rental units each have 1,440 square feet of living area, three bedrooms two bathrooms and a garage.   The original unit in which Orellana and his extended family resides has nine rooms, including five bedrooms, three bathrooms and 2,145 square feet of living area.   Orellana collects as much as $3,800.00 as monthly rental income.   The value of the premises which he owns is a significantly more valuable asset today than it was on the day that he purchased it.

B. CUTPA

Orellana has raised Connecticut's Unfair Trade Practices Act, General Statutes § 42–110a et seq., as a claim in his cause of action against Chiera and has raised the same claims as a counterclaim in the foreclosure.   Orellana raises the same allegations which he previously asserted in the negligent misrepresentation claim, and, in addition, alleges conduct occurring after Orellana's purchase of the premises through the winter of 2006/2007, the point where the relationship completely broke down between these two men.   These allegations include, among others, the failure to provide Orellana with a written agreement as well as written receipts as the work progressed, claims of negligent supervision of the construction, alleged coercion and misconduct in the making of the note and deed, alleged irregularities and misconduct in the listing of the property for sale and the presentation of an offer to purchase and Chiera's alleged unfair advantage over Orellana resulting from Orellana's supposed inability to speak and write English.   Because the court finds, as will be more fully set forth below, that Orellana has failed to set forth a claim for relief under CUTPA, the court will not address these allegations here but may address them as they may be deemed relevant to the special defenses asserted against the foreclosure.

“Even though § 42–110g(a) authorizes the award of compensatory and punitive damages for a CUTPA violation, the statute is not self-executing.   Litigants who seek to recover damages under CUTPA must meet two threshold requirements.   First, they must establish that the conduct at issue constitutes an unfair or deceptive trade practice.   Second, they must present evidence providing a basis for a court to make a reasonable estimate of the damages that they have suffered.   See Reader v. Cassarino, 51 Conn.App. 292, 299, 721 A.2d 911 (1998).   There is no automatic entitlement to damages.”  New England Custom Concrete, LLC v. Carbone, 102 Conn.App. 652, 666, 927 A.2d 333 (2007).   Orellana, as the court has noted above in the discussion of his negligent misrepresentation claim, has failed to prove damages.

III

DEFENDANT'S CLAIMS,FORECLOSURE AND PLAINTIFF'S DEFENSES

The court finds the following allegations of Chiera's complaint sounding in foreclosure proven.   By promissory note dated March 28, 2006, Orellana promised to pay to the order of Chiera the principal sum of $450,000 payable on demand together with interest at the rate often percent per annum.   By deed of the same date, Orellana, to secure the note, mortgaged to Chiera the subject premises of which he was then owner.   The deed was recorded in the Danbury Land Records on March 29, 2006, in volume 1839, page 589.   The note and deed are owned by Chiera.   Chiera has elected to demand payment of all principal and interest due.   Orellana is now in default under the terms of the note and deed.   Orellana is the record owner of the premises and is in possession thereof.   The defendant, Bank of America, claims an interest by virtue of a mortgage in the original principal amount of $120,000, dated April 20, 2007, and recorded May 3, 2007, in volume 1930, page 944.

“[A] foreclosure action constitutes an equitable proceeding ․ In an equitable proceeding, the trial court may examine all relevant factors to ensure that complete justice is done ․ The determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court ․ Historically, defenses to a foreclosure action have been limited to payment, discharge, release or satisfaction ․ or, if there had never been a valid lien ․ The purpose of a special defense is to plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action ․ A valid special defense at law to a foreclosure proceeding must be legally sufficient and address the making, validity or enforcement of the mortgage, the note or both ․ Where the plaintiff's conduct is inequitable, a court may withhold foreclosure on equitable considerations and principles ․ Furthermore, if the mortgagor is prevented by accident, mistake or fraud from fulfilling a condition of the mortgage, foreclosure cannot be had.”  (Citations omitted;  internal quotation marks omitted.)  LaSalle National Bank v. Shook, 67 Conn.App. 93, 96–97, 787 A.2d 32 (2001).

Orellana has asserted four special defenses to the foreclosure.   Some of these address the making and the validity of the note and deed, others address their enforceability in terms of appealing to the court's discretion in the exercise of its equitable powers.   As noted above, this court has already made findings that Chiera made no misrepresentations, fraudulent or otherwise, upon which Orellana relied in his decision to purchase the premises.   These allegations by Orellana form part of the bases for his defenses to the foreclosure.   The court now makes the following additional findings.   Orellana signed the promissory note and mortgage deed at the March 28, 2006 meeting at Brauneisen's office freely and voluntarily and with full knowledge of their terms and conditions.   Orellana signed the documents to secure the repayment to Chiera of his financial investment in the project as well as a stake in a share of the profits from the eventual sale of the two units once they were declared as legitimate condominium units.   The amount of the note and deed was a number chosen to more than adequately cover the cost of the construction and any share that might be owed to Chiera.   For these reasons, the court finds that there exists no factual bases to support the special defenses of duress and fraudulent inducement.   See Noble v. White, 66 Conn.App. 54, 59, 783 A.2d 1145 (2001);  Barasso v. Rear Still Hill Road, LLC, 81 Conn.App. 798, 842 A.2d 1134 (2004).

With regard to the special defenses directed toward the court's exercise of its equitable powers, Orellana invokes the doctrines of unclean hands and equitable estoppel, relying on the same factual basis which he has alleged for his other special defenses.  “The doctrine of unclean hands expresses the principle that where a plaintiff seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue ․ Unless the plaintiff's conduct is of such a character as to be condemned and pronounced wrongful by honest and fair-minded people, the doctrine of unclean hands does not apply.”  (Internal quotation marks omitted.)  Thompson v. Orcutt, 257 Conn. 301, 310, 777 A.2d 670 (2001).   “The party seeking to invoke the clean hands doctrine to bar equitable relief must show that his opponent engaged in wilful misconduct with regard to the matter in litigation.”  (Internal quotation marks omitted.)  Ridgefield v. Eppoliti Realty Co., Inc., 71 Conn.App. 321, 335, 801 A.2d 902, cert. denied, 261 Conn. 933, 806 A.2d 1070 (2002).  “[A]ssert[ing] the special defense of equitable estoppel ․ the doctrine of equitable estoppel [in its traditional form] states that a party (1) who is guilty of a misrepresentation of existing fact including concealment, (2) upon which the other party justifiably relies, (3) to his injury, is estopped from denying his utterances or acts to the detriment of the other party ․ In considering the law of estoppel in Connecticut, we have stated:  Under our well-established law, any claim of estoppel is predicated on proof of two essential elements:  the party against whom estoppel is claimed must do or say something calculated or intended to induce another party to believe that certain facts exist and to act on that belief, and the other party must change its position in reliance on those facts, thereby incurring some injury ․ It is fundamental that a person who claims an estoppel must show that he has exercised due diligence to know the truth, and that he not only did not know the true state of things but also lacked any reasonably available means of acquiring knowledge.”  Connecticut National Bank v. Voog, 233 Conn. 352, 366–67, 659 A.2d 172 (1995).   The court finds insufficient basis to support a defense to the foreclosure of the mortgage under either of these doctrines, or for the court to forebear the entry of the equitable relief of a judgment of foreclosure sought by Chiera.

At the conclusion of the trial, counsel for Chiera indicated to the court that, somewhat in the nature of an election of remedies, Chiera is primarily seeking a judgment of foreclosure in the action in which Chiera is the plaintiff and that the counterclaims filed by Chiera in the action commenced by Orellana as plaintiff are only to be considered an alternative grounds of relief if the court finds that foreclosure of the mortgage is not appropriate, with the exception of the counts sounding in negligent infliction of emotional distress and negligent bailment.   The claims of both parties for emotional distress and Chiera's claim of negligent bailment are discussed below.   Because the court finds that Chiera has proven a prima facie case in his claim of foreclosure and Orellana has failed to prove any defense, the court will enter a judgment of foreclosure in favor of Chiera and will not address his claims of breach of contract, unjust enrichment, quantum meruit and fraud asserted as counterclaims in the action commenced by Orellana.

The remaining issue is the amount of the debt.   As the court has previously noted, over the course of the years he was involved with the project Chiera paid $227,688.37 of his own funds for materials and supplies used in the project and advanced $11,000 to Orellana as a loan at his request.   Chiera was paid a total of $73,015.50 by Orellana.   There was no evidence of the claimed value of Chiera's time or labor.   The premises were never declared a condominium and there was no evidence as to the value of the individual apartments as condominium units.   The court finds the debt to be $165,672.87.

IV

NEGLIGENT BAILMENT

After the renovation of the original apartment and during the construction of the two additional units, at a point in time when the exterior had been completed and work was progressing on the interior, Chiera had been storing tools and equipment which he was using on the construction at the premises.   Some tools and equipment were stored inside one of the locked units and other tools were stored in a locked van parked on the premises.   Chiera had in his possession the keys to the van and the keys to the unit.   Orellana had the keys to neither.   At the time Orellana and his family were living in the original apartment.   One night, both the unit under construction and the van were broken into and the tools and equipment stolen.   In addition, the unit was vandalized.   The unit was entered by breaking in the front door and the van by breaking a window.   By Chiera's estimate the value of the property taken was worth $30,000.   Chiera claims the loss was the responsibility of Orellana under a theory of negligent bailment.

“A bailment involves a delivery of the thing bailed into the possession of the bailee, under a contract to return it to the owner according to the terms of the agreement.   A relationship of bailor-bailee arises when the owner, while retaining general title, delivers personal property to another for some particular purpose upon an express or implied contract to redeliver the goods when the purpose has been fulfilled, or to otherwise deal with the goods according to the bailor's directions.   In a bailment, the owner or bailor has a general property [interest] in the goods bailed.   The bailee, on the other hand, has mere possession of items left in its care pursuant to the bailment.”  (Internal quotation marks omitted.   Internal citations omitted.)   B.A. Ballou And Company, Inc. v. Citytrust, 218 Conn. 749, 753, 591 A.2d 126 (1991).  “In the care of property, the bailee's contractual obligation is to exercise due care for the safekeeping of the bailed property, and, so, essentially, when loss or damage occurs, liability is based on negligence, even though negligence constitutes a breach of contract.   Once a bailment has been established and the bailee is unable to redeliver the subject of the bailment in an undamaged condition a presumption arises that the damage to or loss of the bailed property was the result of the bailee's negligence.”  (Internal quotation marks omitted.   Internal citations omitted.)  Barnett Motor Transportation Company, Inc. v. Cummins Diesel Engines of Connecticut, Inc., 162 Conn. 59, 63, 291 A.2d 234 (1971).   Neither the unit under construction nor the van parked outside were under the possession or control of Orellana.   The court finds that the evidence does not support the existence of a contract of bailment between the two men.   Chiera's claim of negligent bailment is unproven.

V

EMOTIONAL DISTRESS CLAIMS

Both Orellana and Chiera have filed claims for negligent infliction of emotional distress arising from the financial difficulties each claims to have been through as a result of this ordeal.   Orellana says he suffers from anxiety and loss of sleep.   His wife attests to his distress and says he has bad dreams.   Orellana claims to have sought counseling on four occasions but can't remember the dates or time frame.   Chiera also claims anxiety and distress caused by financial hardship brought on by the amount of money he has tied up in the development of the premises.   Chiera has several rental properties in foreclosure and has had his bank accounts frozen.   He claims this has humiliated him and affected his marital relations with his wife.   Neither of these two men have introduced treatment records or testimony of any mental health service providers.  “[I]n order to prevail on a claim of negligent infliction of emotional distress, the plaintiff must prove that the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm.”  (Internal quotation marks omitted.)  Larobina v. McDonald, 274 Conn. 394, 410, 876 A.2d 522 (2005).   To prevail on a claim of negligent infliction of emotional distress, a plaintiff must prove the following elements:  “(1) the defendant's conduct created an unreasonable risk of causing the plaintiff emotional distress;  (2) the plaintiff's distress was foreseeable;  (3) the emotional distress was severe enough that it might result in illness or bodily harm;  and (4) the defendant's conduct was the cause of the plaintiff's distress.”  Carrol v. Allstate Ins. Co., 262 Conn. 433, 444, 815 A.2d 119 (2003).   As to the first and second elements, they “essentially [require] that the fear or distress experienced by the plaintiffs be reasonable in light of the conduct of the defendants.   If such [distress] were reasonable in light of the defendants' conduct, the defendants should have realized that their conduct created an unreasonable risk of causing distress, and they, therefore, properly would be held liable.   Conversely, if the [distress] were unreasonable in light of the defendants' conduct, the defendants would not have recognized that their conduct could cause this distress and, therefore, they would not be liable.”  (Internal quotation marks omitted.)  Larobina v. McDonald, supra, 274 Conn. 410.

The court finds that neither party has proven a claim of negligent infliction of emotional distress.   Specifically, the court finds that the claimed distress experienced by each of these men is not reasonable in light of the conduct of the other.

CONCLUSION AND ORDERS

For the foregoing reasons, the court enters judgment as follows.   In the matter of Orellana v. Chiera, CV–07–6000489–S, on the plaintiff's complaint judgment enters in favor of the defendant on all counts.   On the defendant's counterclaim, counts one through five are deemed withdrawn.   As to the defendant's counterclaim counts six and seven, negligent infliction of emotional distress and negligent bailment, judgment enters in favor of the plaintiff, Orellana.   In the matter of Chiera v. Orellana, CV–08–5004827–S, on the plaintiff's complaint the court enters judgment of strict foreclosure with law days set to commence on Tuesday, October 25, 2011, for the owner of the equity and succeeding days thereafter for subsequent encumbrancers in inverse order of their priorities.   The court reiterates the following findings:  the debt is found to be $165,672.87;  the value of the subject premises is found to be $460,000.   On the defendant's counterclaim judgment enters in favor of the plaintiff.

Michael G. Maronich, Judg

Maronich, Michael G., J.