Clem Martone Construction v. Patrick DePino et al. (2012)

MEMORANDUM OF DECISION REGARDING ATTORNEYS FEES

The plaintiff, Clem Martone Construction (hereinafter “Martone”), instituted this one-count action to foreclose a mechanic's lien.   The defendants (hereinafter DePino”), filed an Answer and one-count Revised Counterclaim asserting breach of contract against the plaintiff arising out of the same transaction as underpinned the mechanic's lien foreclosure, i.e., the construction of a home by Martone for DePino on 132 While Hollow Road, North Branford, CT.

The case was assigned to Judge Trial Referee Skolnick for determination of the amount of the debt in connection with the foreclosure and the hearing concerning the Counterclaim.

On October 19, 2011, a well reasoned 35–page long Memorandum of Decision by

5. The Court found the debt owed by the defendants was in the amount of $18,875.00 (subtracting the counterclaim damages from the stipulated unpaid balance of the contractual agreement between the parties).

6. The Court found that the award of attorneys fees pursuant to C.G.S. § 52–249(a) was premature at the time of the Memorandum of Decision and was deferred until the entry of the Judgment of Foreclosure.

On December 1, 2011, counsel appeared in the Foreclosure Court before the undersigned and agreed that the debt was $18,750.00 (i.e., the amount found by Judge Skolnick having subtracted the $9,125.00 value of the finding of damages in the Counterclaim from the stipulated debt of $28,000.00), the fair market value of the subject property was $440,000.00, being $140,000.00 attributable to site and $300,000.00 to improvements thereon, that an appraisal fee of $375.00 and a title search of $275.00 were appropriate and that the Court should determine the appropriate attorneys fees.

Martone's counsel submitted an Affidavit, and Supplemental Affidavit, showing a total of $37,000.00.   DePino opposed the plaintiff's request for attorneys fees to the extent that Martone's request includes any attorneys fees related to the defense of the Counterclaim.

The Court partially agrees with the defendants, but after careful review of the plaintiff's counsel's Affidavits regarding attorneys fees, awards the sum of $10,368.75 for attorneys fees necessitated by the prosecution of the foreclosure aspects of the subject mechanic's lien.   Though the DePinos stipulated, through counsel, that the balance due under the contract between the parties for the construction of the subject home was $28,000.00, the DePinos claimed that Martone was precluded from foreclosing on the mechanic's lien and recovering the amount of the unpaid balance because Martone did not render substantial performance ¹ under the contract, See P. 10, ¶ 2 of the October 19, 2011 Memorandum of Decision of Skolnick, J. The Court noted that Martone had the burden of proof of establishing that it had substantially performed the contract, otherwise, it had no right to recover under the mechanic's lien statute in this case.   Judge Skolnick found that the plaintiff had proved that it had substantially performed its obligations under the contract and was entitled to recover, See October 19, 2011 Memorandum of Decision, P. 1–13.

The defendant's Counterclaim alleged that the plaintiff had failed to perform its labor and services in a workmanlike manner.   In their Revised Counterclaim, DePino asserted nineteen separate aspects of alleged deficiency by Martone.   The trial court heard from at least six expert witnesses in connection with the prosecution and defense of both the complaint and counterclaim.   The Court concluded that Martone had proved the essential elements for a successful prosecution of the mechanic's lien and that DePino had proved their Counterclaim only in the amount of $9,125.00.

The question for this court is what attorneys fees are to be awarded to the plaintiff.   Generally, each party is responsible for the payment of his/her own attorneys fees, i.e. the so-called ‘American Rule’ of attorneys fees, Broadnax v. New Haven, 270 Conn. 133, 178–79 (2004).   However, sometimes a contractual agreement of the parties or an applicable statute modifies this rule.

This case involves only the application of a statute, Connecticut General Statute § 52–249, governing the award of attorneys fees in foreclosure of mechanic's lien proceeding.   The written agreement between the parties does not contain a clause or provision allowing collection or award of attorneys fees as a remedy for breach of contract.   Had there been such a provision in the parties' agreement, then Connecticut General Statute § 42–150aa would have been applicable.

In Russo Roofing Inc. v. Rottman, 86 Conn.App. 767, 776 (2005), the Appellate Court unanimously found that “A literal interpretation of C.G.S. § 42–150aa and § 52–249 would award a plaintiff duplicate attorneys fees.   That, however, is not this case.   Attorneys fees under § 42–150aa would be for the contract aspects of the action, and attorneys fees under § 52–249 would be for the foreclosure aspects of the action.”   Therefore, this Court must now determine how much of the plaintiff's attorneys fees are attributable to the foreclosure aspects of the mechanic's lien and which of the attorneys fees are attributable to the defense of the ‘contractual aspects' of the Counterclaim.

The Court rejects the DePinos' assertion that all fees other than approximately $1,500.00 are related to the defense of the Counterclaim because much of the work described in plaintiff's Affidavit of Attorneys Fees, prior to trial, was necessary to establish both the amount of the debt (the parties did not agree on the amount of the debt until the same was stipulated to the Court at the commencement of trial) and that Martone had substantially performed its contractual obligations.   The latter requirement is a necessary element of Martone's case in chief, See 10/19/11 Memorandum of Decision, Skolnick, J., P. 11, ¶ 1, “(W)ithout a finding that the plaintiff substantially had performed the contract, there can be no right to recover under the mechanic's lien statute with a reference to the contract price.,” Intercity Development, LLC v. Andrade, 96 Conn.App. 608, 614 (2006), rev'd in part on other grounds, 286 Conn. 177 (2008).   Therefore, in this case, Martone had to establish both the unpaid balance arising out of the home construction contract, but also, because DePino contested that Martone had substantially performed his contractual obligations, Martone to prove substantial performance of its contractual obligations in order to recover under the mechanic's lien statute.   The trial court found that Martone had proved ‘substantial performance’ See 10/19/11 Memorandum of Decision, Skolnick, J., P. 12, ¶ 1.

Plaintiff relies upon Northeast Tank and Environmental Services, Inc. v. TA Operating Corp., 2008 WL 4022425 (Conn.Super.) [46 Conn. L. Rptr. 124], Edgewood MAC, LLC v. MIRG Mystic Harbour, LLC, 2009 WL 1141382 (Conn.Super.) [47 Conn. L. Rptr. 509] and Moasser v. Becker, 2010 WL 5610931 (Conn.Super.) [51 Conn. L. Rptr. 184], in connection with its claim for attorneys fees.   These cases are only tangentially helpful.

Northeast Tank involves the prosecution of a mechanic's lien where there is no written or contractual agreement between the parties, no counterclaim and only the prosecution of a claim with a special defense.   The lack of a counterclaim in Northeast Tank, upon which so much of the issue of contested attorneys fees in the instant case hinges, makes Northeast Tank factually distinct and deficient from the instant matter.

In Edgewood MAC, LLC, there is a written agreement between the parties and involves the prosecution of a foreclosure mechanic's lien.   However, the issue before the court did not involve a counterclaim but rather the assertion that attorneys fees related to proving the validity and priority of the mechanic's lien were not appropriate subjects for attorneys fees based on C.G.S. § 52–249(a).   Unfortunately, the issues of validity and priority of the mechanic's lien were not involved in the instant matter.

The Moasser v. Becker trial court decision relied upon by plaintiff addressed the issue of awarding attorneys fees to the foreclosing party for postjudgment appellate work.   The instant matter does not involve any appellate work, but rather the question of awarding attorneys fees for the foreclosure aspects of the trial court proceedings.

This Court finds Russo Roofing Inc. v. Rottman, supra, binding in the instant matter.   There the plaintiff sought to foreclosure a mechanic's lien for roofing repairs done to the defendant's house and garage.   The defendant asserted a counterclaim for damages resulting from alleged defective workmanship.   The Appellate Court unanimously held that the trial court must distinguish between attorneys fees incurred as a result of the prosecution of the foreclosure aspects of the case and attorneys fees incurred as a result of the defense of contractual aspects of the counterclaim case.   In Russo, unlike the instant matter, the construction contract between the parties provided for the award of attorneys fees in the event of default.   The Appellate Court held that the amount of attorneys fees related to the contractual aspects of default were governed by application of C.G.S. § 42–150aa and § 42–150bb.   Those statutes are inapplicable to the instant matter as there is no written agreement between the parties that provides for an award of attorneys fees upon default.

However, the court in Russo noted that C.G.S. § 52–249 does provide for the award of attorneys fees in actions to foreclose a mechanic's lien.   The Appellate Court remanded the Russo case to the trial court with instructions that the attorneys fees under § 52–249 should be awarded for “the foreclosure aspects of the action.”

As noted above, the foreclosure aspects of the instant action, insofar as the matter was before J.T.R. Skolnick, was the determination of the debt.   That determination was made, in this case, by finding “that the reasonable value for which recovery may be had in cases of substantial performance of building contracts, is to be ascertained with reference to the contract price and by deducting from that price such sum as ought to be allowed for omissions and variations.,” Intercity Development.   LLC v. Andrade, supra, p 613, and whether Martone had substantially performed his contractual obligations.   The trial court accepted the stipulation of the parties that the balance of the contract price was $28,000.00 (twenty-eight thousand dollars) and found, after seven trial days much of which dealt with the prosecution and defense of the counterclaim, that Martone had substantially performed its contractual obligations.

Though Martone's burden to prove substantial performance of its contractual obligations is intertwined with the defense of the counterclaim, this court is bound by the unanimous Appellate Court holding in Russo that attorneys fees under § 52–249(a) are awarded only for the foreclosure aspects of the case.

“(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.”  Moasser v. Becker, 78 Conn.App. 305, 324, cert. denied, 266 Conn. 910 (2003).   Had DePino filed an independent action for damages claiming a breach of contract against Martone for the exact same reasons as are alleged in the counterclaim, any attorneys fees Martone incurred in the defense of such action, absent a contractual obligation or applicable statute—neither of which appear to exist in this instance, would have been borne exclusively by Martone.   Simply because DePino asserted the instant counterclaim in the context of Martone's existing mechanics' lien foreclosure action, Martone's attorneys fees incurred for defending the counterclaim should not be imposed upon DePino.

The Court has concluded that the 211.5 hours of time submitted by plaintiff's counsel is only partly related to the proof of the unpaid contractual balance and of Martone's substantial performance.   The court finds the hourly rate of $175.00 reasonable, see The Land Group, Inc. Palmieri, 123 Conn.App. 84, 98 (2010).²  The defense did not challenge the same.   After careful review of the briefs and arguments of counsel, trial court Memorandum of Decision of October 19, 2011 and especially the lengthy affidavits of attorneys fees and supplemental fees filed by Martone in this matter, the court concludes that 59.25 hours of the work described in the Affidavits of attorneys fees do relate to the foreclosure aspects of the case.   Therefore, the Court concludes that attorneys fees attributable to the prosecution of the mechanic's lien foreclosure total $10,368.75.

WHEREFORE, the Court finds that attorneys fees in this matter are $10,368.75.

BY THE COURT

ZEMETIS,T.

FOOTNOTES

FN1. “Substantial performance contemplates the performance of all items of a building contract except for minor details, those easily remedied by minor expenditures ․ Whether a building contractor has met this standard is ordinarily a question of factor for the trier.”  Argentinis v. Gould, 23 Conn.App. 9, 14 (1990), rev'd in part on other grounds, 219 Conn. 151 (1991)..  FN1. “Substantial performance contemplates the performance of all items of a building contract except for minor details, those easily remedied by minor expenditures ․ Whether a building contractor has met this standard is ordinarily a question of factor for the trier.”  Argentinis v. Gould, 23 Conn.App. 9, 14 (1990), rev'd in part on other grounds, 219 Conn. 151 (1991).

FN2. “[T]he initial estimate of a reasonable attorneys fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate ․ The courts may then adjust this lodestar calculation by other factors.”  (Internal quotation marks omitted.)  Ernst v. Deere & Co., 92 Conn.App. 572, 576, 866 A.2d 845 (2005).   The court in the present case considered testimony by the attorneys on their respective experience, length of practice, nature of their specialties in the practice of law, the hourly rates that they typically charged clients for their services and the time and effort they spent in representing their clients both pretrial and at trial..  FN2. “[T]he initial estimate of a reasonable attorneys fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate ․ The courts may then adjust this lodestar calculation by other factors.”  (Internal quotation marks omitted.)  Ernst v. Deere & Co., 92 Conn.App. 572, 576, 866 A.2d 845 (2005).   The court in the present case considered testimony by the attorneys on their respective experience, length of practice, nature of their specialties in the practice of law, the hourly rates that they typically charged clients for their services and the time and effort they spent in representing their clients both pretrial and at trial.

Zemetis, Terence A., J.