James E. Burns, Jr. v. David Y. Adler et al. (2012)

MEMORANDUM OF DECISION

This case involves a claim by the plaintiff, a contractor, that he carried out a demolition and renovation project from the fall of 2007 to the end of the summer of 2008.   He, his crew and subcontractors did the work on a weekend residence located in northwestern Connecticut.   The plaintiff claims that, although he was paid some $985,000 for his work, he is still owed more than $200,000.   This matter, sounding principally in breach of contract, was tried to the court.

PROCEDURAL AND FACTUAL HISTORY

The plaintiff, James E. Burns, Jr. d/b/a Jim Burns Handyman Service also known as JBHS, Home Remodeling & Construction Management, is a high school graduate who began carrying out sophisticated building projects in 2000.   Most of his work was based on oral agreements with his customers.   In September 2007, the plaintiff had conversations with defendant David Y. Adler about renovations and remodeling on a “weekend” home that Adler and his wife, defendant Amie R. Weitzman, planned to buy in Lakeville, Connecticut.¹  Adler earned a law degree in 1988, passed the bar in 1990, and, thereafter, practiced law until he became an investment banker.   Adler also had prior experience supervising renovation projects on his other properties.   Weitzman is a professional interior designer.

The preliminary talks between the parties were very general in nature.   Adler wanted substantial demolition in the Lakeville house, the addition of a second floor, and he wanted to expand the house's footprint, but most of all, he wanted the work to be done as quickly as possible so that the defendants, whose primary residence is in New York City, could use the house during the summer of 2008.   When the project was completed, the defendants had made payments to the plaintiff in the amount of $985,000.   However, the plaintiff alleges that the defendants declined to pay him the balance due which, the plaintiff alleged in his complaint, is $214,039.09.

On December 2, 2008, the plaintiff brought suit against the defendants, Adler and Weitzman, as well as the Salisbury Bank and Trust Company.²  The operative complaint is a revised complaint filed on February 17, 2009.   It alleges that the plaintiff entered into an agreement with the defendants to effect improvements to a home located at 135 Interlaken Road, Salisbury, Connecticut.   The plaintiff claims that he performed the services requested, but that he was only partially paid for his efforts.   The complaint is in three counts seeking foreclosure of a mechanic's lien, and alleging breach of contract and unjust enrichment, respectively.

The defendants denied the allegations of the complaint and raised six special defenses.   The defendants also filed a four-count counterclaim, alleging a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), negligence, breach of contract and unjust enrichment.   The plaintiff, in turn, denied the allegations of the counterclaim and raised two special defenses.

The parties agreed that the issue of foreclosure of the mechanic's lien would be bifurcated from the primary trial and, if necessary, addressed in a separate hearing.   Furthermore, both parties sought attorneys fees, but agreed that this issue would also be bifurcated from the primary trial and, if necessary, addressed in a separate hearing.

This matter was first tried to the court on October 27, 2011.   The trial continued on November 2, 3, 4 and 10, 2011.   The parties filed simultaneous post-trial briefs on January 6, 2012 and simultaneous reply briefs on January 17, 2012.

At the time of the preliminary discussions, the defendants did not have any formal plans to show to the plaintiff.   The defendants closed on the Lakeville property on or about October 4, 2007, and, absent plans, the plaintiff immediately began work demolishing the interior.   Thereafter, the plaintiff's immediate tasks were to reconfigure some of the rooms and plan for the addition of a second story.

The record reflects three significant issues that were manifest throughout the project and ultimately helped bring about this litigation.   First, the project evolved continuously from beginning to end.   Second, the parties shared a mutual disregard for the provisions of Connecticut's Home Improvement Act (“HIA”) and for documentation, in general.   Third, the defendants were so focused on completing the project expeditiously that they made expense, quality control and personal responsibility for the project all subordinate to the goal of completing the project on time.   Adler testified that he knew that making “speed” a priority would make the project more expensive, but he did not think that such a focus would have a significant impact on the cost of the project or that the nine month time frame reflected a tight schedule.   The record reveals, however, that Adler knew little about the details of construction and renovation, and so he had no legitimate basis for reaching the latter conclusions.

The record reflects that the plaintiff and Adler entered into a very rudimentary general contract dated October 5, 2007, that had a “start date” of October 11, 2007.   Plaintiff's Exhibit (“PX”) 3. The contract was a time and materials contract providing for payment at the rate of “$45 per man plus any expenses ․” The contract required a twenty thousand dollar deposit, which the defendants paid.   It does not reflect a completion date for the project because there were no final plans when the contract was signed;  indeed, it does not appear that the plans were ever truly finalized.   Despite the defendants' claims to the contrary, the record does not support the conclusion that the parties ever entered into a fixed price contract.

The October 5, 2007 contract reflects the plaintiff's effort to conform to the requirements of the HIA, a law with which the plaintiff was personally unfamiliar, but which had been mentioned to him by his attorney.   The two-page contract carries Adler's signature on page two along with the date of October 9, 2007.   Adler is the only signatory on the contract offered into evidence;  there is no evidence that Weitzman ever entered into a written contract with the plaintiff.   The contract carries three copies of the “Notice of Cancellation,” as required by the HIA. The copies of the cancellation notice indicate that they are for the customer, the customer's files and the contractor.   Bizarrely, Adler, in addition to signing the contract, also signed all three copies of the cancellation notice and dated each of them “October 9, 2007.”   PX 4. The plaintiff, understandably puzzled, called Adler to determine his true intentions with regard to the project.

Adler testified that he reviewed the contract carefully, but that he did not read the cancellation notices closely, and he “didn't know what the purpose of the cancellation notice was.”   Trial Tr., 64–65, November 4, 2011.   Adler also testified that he did not notice that the contract lacked a completion date.   Nonetheless, throughout his testimony, Adler continued to imply that he had read the contract carefully.   The court finds that Adler's testimony on this issue is not credible.   In addition to the foregoing inconsistencies, the record also reflects an email from Adler, purportedly explaining why he signed the cancellation notices, with the subject line:  “Sorry I had my assistant print it out and just signed everything.”   PX 5. In response to that email, the plaintiff requested a new contract or a letter stating that the original contract was still in effect.   Adler never sent a new contract, nor did he send the letter that the plaintiff requested.   The plaintiff testified that he signed the contract and gave a copy to the defendants, but no such copy was introduced at the time of trial.

The defendants claim that they never received a completely executed contract.   On the other hand, the record does not reflect that either defendant ever expressed any concern about their apparent failure to enter into an accurate written contract.   On the contrary, PX 5 is representative of the defendants' hierarchy of concerns.   Specifically, Adler's reply to the plaintiff's request for written clarification of the cancellation issue stated, “[w]ill do on the contract,” but then Adler immediately shifted to the topic of moving the project quickly, asking the plaintiff to send all samples to him by Federal Express because it would be “more efficient” in that it would permit the defendants to “make decisions expeditiously.”   Adler's lack of understanding of the practical concerns related to his own project is also suggested in that same PX 5 in which he requested a price for “quarter-sewn [sic] ³ flooring (I don't even know what that is but remember amie [sic] and the architect discussing it) ․”

The demolition/renovation/remodeling project at issue (“the project”) occupied the plaintiff virtually full-time from the time he entered into the agreement until he was terminated by the defendants in September 2008.   The plaintiff accepted no other significant jobs during the foregoing time period.   That fact, coupled with the defendants' determination not to make the final $214,039.09 payment, put the plaintiff out of business.   Without the final payment, the plaintiff could not pay his subcontractors, some of whom brought suit against him.   Likewise, the plaintiff could not pay for all of his materials, resulting in some of his materials suppliers bringing suit against him.   The plaintiff testified that, as a result, he has no expectation that he can rebuild his business because subcontractors will not work for him in the future, and he will not be able to purchase supplies at contractors' discount prices.

Throughout the course of the project, the plaintiff received work orders by telephone and email from multiple sources, including both of the defendants, the defendants' architect, Beth Slotnick, and Weitzman's assistant, Julie Weiner.   It is apparent that none of those sending orders to the plaintiff was fully aware of the totality of the orders sent to the plaintiff.   In fact, Adler testified that he never saw the many emails sent by Weitzman's assistant until the pretrial discovery process.   The evidence is convincing and overwhelming that this project took many directions that were never anticipated when the work began.   The written plans were revised many times, and the email communications introduced into evidence show that changes to the project were frequent and significant.

Some of the email orders admitted into evidence compel the conclusion that this project was marked by untrammeled profligacy on the part of the defendants and their associates.   For example, Weitzman's assistant directed the plaintiff, a $45 per hour contractor, to assemble furniture at the house.   He was also assigned to roll up rugs, put mattresses on beds, mow the lawn, remove brush and chop firewood.   On other occasions, the plaintiff was asked to price various items that the defendants intended to purchase and install in the house, such as a wine refrigerator and an oven hood vent;  PX 63, 62;  which are tasks that do not normally fall to a contractor.   In one notable instance, Weitzman's assistant directed the plaintiff to stand by in order to accept a shipment of window shades.   Thereafter, she advised him that the shades were the wrong size and urged him to return them promptly before the UPS return label expired.   Thus, in order to save the cost of a mailing label, a contractor was effectively hired to do a job that in no way required a contractor's skills.

The plaintiff testified that he attempted to curb costs by not adding a contractor's markup to subcontractor charges.   He also testified that he did not add a surcharge to the cost of materials that he purchased from the suppliers, even though it is customary to do so in his business.   As the project went forward, from time to time the plaintiff would ask the defendants for payments to cover expenses and to keep the project moving forward, and, in response, the defendants initially sent the checks that were requested.   The checks were sometimes in the range of forty thousand dollars, and the defendants sent them to the plaintiff without asking for an accounting with regard to time or materials expenditures.   The plaintiff never sent specific bills to the defendants, and the defendants never requested such bills, at least in the early months of the project.

The parties originally discussed a total cost of the project in the $400,000 range, but that figure was not based on any specific set of plans, since no final plans existed in the early months of the project.   The plaintiff typically worked six days per week, beginning at 7:00 a.m. and continuing until 5:30 p.m. Sometimes, afterwards, he worked on paperwork associated with the project and, on occasion, worked on Sundays in order to meet the stringent deadline imposed upon him.   He testified that the frequent changes in the project made it increasingly difficult to meet the all-important project deadline of early summer 2008.

The plaintiff testified that he disregarded the defendants' directions on a single occasion.   The plans called for the exterior to be covered with a product known as Tyvek, followed by a rain-repellant covering known as Home Slicker, and those products were both to be covered with shingles.   The plaintiff testified that, instead, he used a product called Typar which, he said, was an equivalent product to the Tyvek/Home Slicker combination but which cost less than the latter products.   The architect complained to the defendants when she discovered this substitution.   Adler discussed the issue with the plaintiff, and told him that he would accept the Typar product, but Adler also told the plaintiff never to disregard instructions in the future.   PX 50.

The plaintiff knew that he was obligated to flash the windows and doors before covering the house with Typar.   The defendants accepted the plaintiff's representation that he had flashed the windows and doors.   Adler testified that, although he accepted the plaintiff's representation that he had flashed the windows and doors, Adler did not know what “flashing” was.

The defendants presented an expert witness, Michael Garfield, who testified that Typar, although it is an advanced version of Tyvek, is not a substitute for Home Slicker.   Instead, Typar is a housewrap that is intended to be used in conjunction with Home Slicker.   Garfield also testified that he removed some shingles where the plaintiff had attached a deck to the house as well as around some windows and doors.   Garfield testified that he did not find any evidence of flashing at those locations.   Garfield's credibility, however, is compromised.   The plaintiff introduced unimpeachable evidence that Adler asked Garfield to lie to a building inspector, if necessary, in order to obtain a certificate of occupancy, and Garfield agreed to do so.   PX 128.   The defendants' architect, Beth Slotnick, testified that when she visited the project during construction, she observed that not all flashing had been done.   She discussed the issue with the plaintiff and, when she returned on a later occasion, she saw that some additional flashing had been done.

As time went on, the pattern of the defendants' change orders and the plaintiff's requests for regular checks continued unabated.⁴  It was not long before the project went well beyond the $400,000 figure that the parties originally discussed.   Nonetheless, the defendants continued to send checks to the plaintiff as he worked assiduously to meet their demands.   It was not until March 2008 that the defendants began to focus on the mounting cost of the project.   At that point, the plaintiff presented the defendants with a budget report showing a projected total cost of $810,267, reflecting both the expenses up to that point and also the anticipated future expenses based upon the state of the project at that time.   PX 52.   On March 25, 2008 the plaintiff sent the defendants a slightly revised budget report that showed that the cost of the completed elements of the project was $518,352.93.   PX 53.   The revised budget report also indicated that anticipated future expenses would bring the total project cost to $795,038.   The report also identified instances of normal contractor charges that were being excluded, such as a ten percent contractor markup on materials.   PX 53.   The record does not reveal that the defendants registered any disagreement with the revised budget report.   In fact, the defendants continued to issue a wide variety of work directions to the plaintiff.

It was not until May 27, 2008 that the plaintiff submitted another budget report to the defendants.   PX 81.   At that point, the plaintiff estimated that total cost of the project would be $886,954.00.   However, that budget report also noted that expenses related to certain additional tasks, that the defendants requested of the plaintiff, were not included in the foregoing figure.   The plaintiff did not estimate the cost for those additional items.   PX 81.   The plaintiff advised the defendants that he owed substantial sums to his subcontractors and required additional funding to keep them working.   Id. Adler testified that, although he was unhappy with the figures reflected in PX 81, he elected to continue with the plaintiff as his contractor because he did not want to change contractors in midproject as he was in a hurry to use the house.   Therefore, the defendants continued to ask the plaintiff to do tasks for them, including the placement of furniture.   These requests flowed from the defendants to the plaintiff through the end of July 2008.   PX 94–104.   Even though it was clear to the defendants that they were going to make more changes and give new assignments to the plaintiff, Adler testified, inexplicably, that he thought the May 27, 2008 budget report reflected the terms of a new, and verbal, fixed price contract.   Trial Tr., 91, November 4, 2011.

On August 25, 2008 the plaintiff submitted “final numbers” for the project, indicating that the project had cost a total of $1,188,350.   By August 4, 2008 the defendants had paid a total of $985,000 to the plaintiff, and, therefore, the balance due was $203,350.00.   PX 105.   Even though there was a substantial balance owed to the plaintiff, the work on the project was, at that point, about 98% complete, according to the plaintiff.   On September 3, 2008, Adler sent an email to the plaintiff, reviewing, in general terms, the expansion of the cost of the project.   That email indicated that, although Adler was unhappy with the costs presented to him, he was willing to review the reported charges.   Adler also expressed his happiness at the quality of the plaintiff's work, and stated that he wanted the plaintiff to continue to work for the defendants, indicating that they wanted the plaintiff to execute a “100+ item punch list [the defendants had] provided to [the plaintiff].”

On September 8, 2008 the plaintiff responded to Adler with another review of the project costs and sought a balance due in the amount of $214,911.00.   PX 109.   On September 12, 2008 the plaintiff provided the defendants with a lengthy email, explaining how the costs of the project grew significantly larger in the final months of work.   PX 110.   The email included a list of twenty-two numbered items, detailing the added costs.   On September 16, 2008, the defendants advised the plaintiff that, notwithstanding his explanations for the various charges, the defendants had concluded that they did not owe the plaintiff anything beyond the $985,000 that they had paid as of August 4, 2008.   The defendants then invited the plaintiff to seek relief through “the judicial system,” and Adler reminded the plaintiff of the fact that Adler is an attorney.

Despite having terminated their business relationship in the September 16, 2008 email, the defendants sent another message to the plaintiff on September 24, 2008 asking him to complete items on the punch list as well as additional “extra” items that were not on the punch list.   On September 27, 2008 the defendants again directed the plaintiff to continue working on the punch list.   Further communications indicate that it was the defendants' intent that the plaintiff continue to work on the project even into October 2008.   Nonetheless, the defendants did not pay the plaintiff's final bill presented to them on August 25, 2008.   As a result, the plaintiff lacked the funds to pay what he owed to various subcontractors and to, at least, one supplier.   Some of those subcontractors and the supplier ultimately sued the plaintiff.   On October 10, 2008, the plaintiff served upon the defendants, and filed, a certificate of mechanic's lien to secure the $214,039.09 payment that is the subject of this case.

This case suffers from the fact that neither party was effective at creating or maintaining proper records.   The plaintiff did not retain all invoices, but rather calculated his expenses largely from his checkbook records, invoices and timesheets that he did retain.   The plaintiff had no employees, but rather did all the administrative work for his business.   The plaintiff did not keep all timesheets relative to the project, nor did he keep a daily construction log or any other record that would show which tradesmen were on the site, what work was done, or what materials were delivered to the site on any given day.   Rather, the crew members kept their own timesheets.   The plaintiff testified that, because he was on site every day, he saw his crew members' work, knew what was being done and paid them for their work when it was justified.   The plaintiff never prepared formal bills for the defendants, but rather would simply ask the defendants for more money when he needed it, and the defendants sent the checks upon request, until they reached the point where they decided that they had paid enough for the project.

The defendants, for their part, did not request formal bills, back up invoices, time cards or even a formal accounting until they were far into the project.   In fact, it does not appear that the defendants ever asked for backup documentation to support the plaintiff's various requests for payment.   The project plans were revised many times and, even when the plans arguably reached a “final” stage, the defendants continued to direct the plaintiff to carry out additional, ad hoc assignments throughout the summer of 2008.   The evidence is clear that at least four different people gave work orders to the plaintiff, including Adler, Weitzman, the defendants' architect and Weitzman's assistant, throughout the course of the project.   The evidence supports the conclusion that of the four people giving orders to the plaintiff, none of them had a complete understanding of what each of the other members of the group was telling the plaintiff to do.

II

THE POSITIONS OF THE PARTIESAThe Plaintiff's Position

The plaintiff seeks damages in three categories:  first, the amount necessary to reimburse subcontractors on the project;  second, payment in the amount of $45 per hour for each of the plaintiff's crew who worked on the project;  and third, payment to the plaintiff at the rate of $45 per hour for the plaintiff's work on the project.   Appendix I to the plaintiff's brief correlates to the first category of damages and shows total payments owed in the amount of $840,178.13.   Appendix II relates to the second category of damages and illustrates that the defendant owed crew payments in a total amount of $282,381.58.   Finally, Appendix III, concerning the third category of damages, indicates that the defendants owe the plaintiff a total of $118,349.10 for his work on the project.

The plaintiff also seeks to recover attorneys fees expended to defend claims brought against him by subcontractors.   The plaintiff argues that those claims would not have been filed if the defendants had met their financial obligations to the plaintiff.   The plaintiff contends that those funds total $3,270.

In sum, the amount that the plaintiff claims is owed to him is $259,178.80, which reflects the total cost of the project, i.e., $1,244,178.80, minus payments made by the defendants through August 2008, i.e., $985,000.00.   Since this amount exceeds the demand in the complaint, the plaintiff moves, post-trial, to amend the complaint to conform to the evidence.

As was discussed, supra, the parties agreed to bifurcate this case and defer action on the first count, seeking foreclosure on a mechanic's lien.   Therefore, the plaintiff focuses his legal argument on the breach of contract claim.   The plaintiff claims that even though Weitzman did not sign the contract, she is still liable under a breach of contract or unjust enrichment theory.

The plaintiff rejects the defendants' claims of alleged non-compliance with the HIA, set forth in the first count of the defendants' counterclaim and their third, fourth, fifth and sixth special defenses.   The plaintiff argues that the contract complied with the HIA, and, alternatively, even if the contract does not technically comply with the requirements of the HIA, he should be allowed to recover because it would be inequitable to deny recovery, on the facts of this case.   As a second, alternative argument, the plaintiff claims that the defendants are invoking the HIA in bad faith which, if found, deprives the defendants of the protections that would otherwise be afforded to them by the HIA.

B

The Defendants' Position

The defendants deny that they owe any additional fees to the plaintiff.   The defendants claim that the plaintiff is not in compliance with the HIA, and argue that some of his work was defective, entitling them to damages for the defective work.   They also argue, in the alternative, that if the plaintiff did not violate the HIA, then the contract was for a fixed fee, which they have paid.⁵  The defendants further argue, also in the alternative, that if the parties had an oral contract to carry out renovations, then that oral contact was a time and materials contract for which they have fully compensated the plaintiff.

The defendants note that Weitzman did not sign the October 9, 2007 written contract, and argue that no claim can lie against Weitzman because she was not a party to the contract between the plaintiff and Adler.   The defendants also argue that the written contract was for demolition only, but agree that, for the demolition phase of the contract, the agreement was on a time and materials basis due to the “many unknowns” regarding the condition of the house in Lakeville.   The defendants point out that the written contract called for change orders to be written and signed by both parties, but they claim that no such change orders were ever issued, at least for the demolition contract.   Additionally, that same written contract called for the parties to create a subsequent contract, with “firm pricing” once “full plans have been developed.”   PX 4.

The defendants argue that the work on the demolition phase was “essentially” completed by mid-November, but continued in some respects through December 2007.   They contend that the renovation phase began on November 18, 2007.   However, the defendants argue that, since there was no HIA-compliant contract for the renovation part of the project, “the agreement between Burns and Adler is unenforceable and all claims by Burns must be barred.”   Defs.' Mem. 37.

The defendants claim that the plans for the project were finished, with minor revisions, and given to the plaintiff at the time he began the renovation phase.   The defendants assert that, even though the renovation work began without a fixed price contract having been executed, they presumed that such a contract would eventually be written and their payments would be credited against it.   Adler claims that PX 52, a two-page summary of the estimated project costs given to him on March 15, 2008, constituted the fixed price for the project.   When, on March 25, 2008 the plaintiff sent Adler a slightly revised version of the proposed project costs, Adler concluded that this revised document was a fixed price to complete the project.   PX 53.

The defendants challenge the plaintiff's billings, contending that they are inaccurate, unreliable and include items that should not have been charged to the defendants.   The defendants also contend that the plaintiff violated express directions not to proceed with any deviation from the architect's plans without first obtaining a written change order signed by both parties.

Finally, the defendants also argue that no evidence was offered against Salisbury Bank and Trust, and so the claims against the bank must be denied.

III

DISCUSSION

This case was tried to the court.  “It is well established that [i]n a case tried before a court, the trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony.”  (Internal quotation marks omitted.)  Blasco v. Commercial Linens, LLC, 133 Conn.App. 706, 709 (2012).

A

Breach of Contract

The contract at issue must be analyzed pursuant to the unique HIA statutory requirements, as well as pursuant to established principles of contract law.   The elements that must be established in order to successfully claim breach of contract are “the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.”  (Internal quotation marks omitted.)  Rosato v. Mascardo, 82 Conn.App. 396, 411, 844 A.2d 893 (2004).

“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 communications is a question of law ․ In giving meaning to the terms of a contract, the court should construe the agreement as a whole, and its relevant provisions are to be considered together ․ The contract must be construed to give effect to the intent of the contracting parties ․ This intent must be determined from the language of the instrument and not from any intention either of the parties may have secretly entertained ․ [I]ntent ․ 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] ․ there is clear and definitive contract language, the scope and meaning of that language is not a question of fact but a question of law.”  (Citations omitted;  internal quotation marks omitted.)  Schwartz v. Family Dental Group, P.C., 106 Conn.App. 765, 771, 943 A.2d 1122, cert. denied, 288 Conn. 911, 954 A.2d 184 (2008).

The question of whether a contract includes an ambiguity requiring the court to look beyond the four corners of the contract to resolve that ambiguity is also governed by well-established principles.  “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 ․ [I]n construing contracts, we give effect to all the language included therein, as the law of contract interpretation ․ militates against interpreting a contract in a way that renders a provision superfluous ․ If a contract is unambiguous within its four corners, intent of the parties is a question of law ․ When the language of a contract is ambiguous, the determination of the parties' intent is a question of fact ․” (Internal quotation marks omitted.)  McCarthy v. Chromium Process Co., 127 Conn.App. 324, 330, 13 A.3d 715 (2011).  “When there is ambiguity, [the court] must construe contractual terms against the drafter.”  (Internal quotation marks omitted.)  Cameron v. Avonridge, Inc., 3 Conn.App. 230, 233, 486 A.2d 661 (1985).

“[A] court cannot import into the agreement a different provision nor can the construction of the agreement be changed to vary the express limitations of its terms.”  (Internal quotation marks omitted.)  Pesino v. Atlantic Bank of New York, 244 Conn. 85, 93, 709 A.2d 540 (1998).  “[A]ny ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms.”  (Internal quotation marks omitted.)  McCarthy v. Chromium Process Co., supra, 127 Conn.App. 330.

The defendants alleged in their fourth special defense that the plaintiff breached the contract, in part, because he made multiple changes during the renovation phase that were not pursuant to a written change order signed by both parties, a requirement set forth in the original contract.   PX 4. The plaintiff alleged, in the second special defense to count one of the defendants' counterclaim, that the defendants wanted the renovations to proceed expeditiously and, as such, “without the delay incidental for written change orders ․”

The court interprets the foregoing to be an allegation that the defendants, through their course of dealing, waived their right to secure written change orders.  “[W]here ․ facts are sufficiently set up in a pleading to warrant the inference of waiver, it will be considered though it is not expressly alleged.”  (Internal quotation marks omitted.)  Stratford v. Secondino & Son, Inc., 133 Conn.App. 737, 745 (2012).  “Waiver involves an intentional relinquishment of a known right ․ Waiver does not have to be express, but may consist of acts or conduct from which waiver may be implied ․ In other words, waiver may be inferred from the circumstances if it is reasonable to do so ․ Furthermore, whether a waiver has occurred is a factual question for the trier.”  (Citations omitted;  internal quotation marks omitted.)  Banks Building Co., LLC v. Malanga Family Real Estate Holding, LLC, 102 Conn.App. 231, 239, 926 A.2d 1 (2007).

The record is clear that the defendants waived their right to rely on the “written and signed” change order requirement by repeatedly giving the plaintiff new orders and job requests, many of which appear to have been spontaneous decisions unilaterally made by the defendants and conveyed to the plaintiff by, in many cases, hurried and offhand email instructions.   There is no significant evidence that the defendants protested when the plaintiff carried out their oral and/or emailed project tasks despite the absence of a “written change order signed by both parties.”

(1)

Home Improvement Act

“The Home Improvement Act was enacted in 1979 to protect homeowners from substandard work and to ensure informed decisions on matters that will undoubtedly have significant financial consequences for homeowners ․ The Home Improvement Act expressly invalidates and makes unenforceable any home improvement contract that does not comply with certain statutory requirements ․ In the absence of bad faith by the homeowner, a home improvement contractor who does not substantially comply with the requirements of the Act is precluded from any recovery for work performed either under the contract or pursuant to a restitutionary theory such as quantum meruit or unjust enrichment.”  (Citations omitted.)   Crispim v. Osorio, Superior Court, judicial district of Hartford, Docket No. CV 07 5012483 (January 21, 2009, Prescott, J.).

The HIA provides in relevant part that “[n]o home improvement contract shall be valid or enforceable against an owner unless it:  (1) Is in writing, (2) is signed by the owner and the contractor, (3) contains the entire agreement between the owner and the contractor ․ (7) contains a starting date and completion date, [and] (8) is entered into by a registered salesman or registered contractor ․ Each change in the terms and conditions of a contract shall be in writing and shall be signed by the owner and contractor ․” General Statutes § 20–429(a).  “The contractor shall provide and deliver to the owner, without charge, a completed copy of the home improvement contract at the time such contract is executed.”  General Statutes § 20–429(c).  “Nothing in this section shall preclude a contractor who has complied with subdivisions (1), (2), (6), (7) and (8) of subsection (a) of this section from the recovery of payment for work performed based on the reasonable value of services which were requested by the owner, provided the court determines that it would be inequitable to deny such recovery.”  General Statutes § 20–429(f).

The written contract, signed by Adler on or about October 9, 2007 does not appear to comply with the mandates of the HIA in three respects.   The copy of the contract introduced into evidence was not signed by the plaintiff and does not contain a completion date.   Further, there is a dispute as to whether the plaintiff delivered a completed copy of the home improvement contract at the time the contract was executed.

(a)

Did both parties sign the contract?General Statutes § 20–429(a)(2)

The plaintiff contends that he did sign the contract but cannot locate his signed copy.   The court had the opportunity to consider the conduct, demeanor and attitude of the witnesses.   The court also had the opportunity to view the testimony of the witnesses in light of all of the documentary evidence that was introduced at trial.   See Stewart v. King, 121 Conn.App. 64, 74–75, 994 A.2d 308 (2010).   Although the plaintiff testified that he signed the agreement, the court cannot credit that testimony in light of the circumstances surrounding the execution of the contract.   The plaintiff retained a copy of the contract that he knew was compromised because Adler had signed both the contract and all copies of the notice of cancellation.   The plaintiff admitted, many times, that his record keeping was poor.   Adler, who contends that he retained all paperwork relative to the project, does not have a fully signed copy of the contract.   It would make little sense for the plaintiff to retain a copy of an obviously compromised contract but fail to retain a fully executed copy.   The plaintiff has not met his burden of proof on this issue, and the court finds that the plaintiff did not sign the contract.

(b)

Does the contract encompass the entire agreement between the parties?General Statutes § 20–429(a)(3)

The plaintiff argues that the contract “substantially complie[s]” with the requirement that it encompass the entire agreement between the parties.   The plaintiff argues that the contract makes clear that the plaintiff would work on a time and materials basis, it identifies the location of the work, it states that the demolition work would be followed by renovation work, and it was “impossible” to know the full scope of the project at the time the contract was signed.

In order to address this issue, the court must examine the entire agreement, pursuant to basic principles of contract analysis.  Schwartz v. Family Dental Group, P.C., supra, 106 Conn.App. 771.   The contract, under the heading “Services to be performed,” expressly states that the plaintiff will “begin demolition af [sic] existing home in preparation of planned remodel.”   However, the contract does not end with that description.   The “special conditions” paragraph of the contract provides that “once full plans have been provided we will start another contract with firm pricing for every aspect of job with the exlusion [sic] of any changes as the project progresses.”   PX 4. Thus, this contract contemplates that the plaintiff was not hired merely to carry out a demolition assignment.   Rather, he was also being retained to carry out work beyond the demolition, i.e., the “planned remodel” work referred to in the “services to be performed” section of the contract.   Indeed, that is exactly what took place.   The details regarding the remodeling were not more fully defined because the defendants had not created “full plans” at the time the contract was executed.   Indeed, the contract's reference to the future development of “full plans” makes clear that both parties recognized that full plans did not exist at the time Adler signed the contract.   Thus, insofar as it was possible to do so at the time the contract was executed, PX 4 encompasses the entire agreement between the parties.   See General Statutes § 20–429(a)(3).

The court finds that the plaintiff has met his burden of proof on the issue of whether the contract encompassed the entire agreement between the parties.   See General Statutes § 20–429(a)(3).

(c)

Does the contract have a starting date and a completion date?General Statutes § 20–429(a)(7)

The contract did not have a completion date.   The plaintiff argues that the parties agree that it would have been “impossible” to identify a completion date at the time they entered the contract.   Therefore, he argues, there should be no finding that he failed to comply with the mandatory provisions of HIA. The court disagrees.   The parties could have chosen a completion date, and then could have, for example, included a remedy in case the project was not completed as of that date.   There was substantial evidence that, at the time the contract was executed, the parties knew the project was to be completed in time for the defendants to use the home throughout the summer of 2008.   It was no more “impossible” to select a completion date for this project than it would be “impossible” to do so for any other complex project.   It is inevitable that a “completion date” in any such contract is both a goal and a prediction.   The contract, on its face, fails to meet the requirements of General Statutes § 20–429(a)(7).

(d)

Did the plaintiff provide and deliver to the defendant a completed copy of the home improvement contract at the time the contract was executed?General Statutes § 20–429(c)

At trial, the plaintiff testified that he provided a fully signed copy of the contract to Adler.   Adler denies having received any copy of the contract from the plaintiff, other than the email version, introduced as evidence, which does not include the plaintiff's signature.   The court has already concluded that the plaintiff has not sustained his burden of establishing that he signed the contract, and, on that basis alone, the court must conclude that the plaintiff did not provide and deliver to the defendants a completed copy of the home improvement contract at the time the contract was executed.   The plaintiff has failed to meet the burden imposed upon him by General Statutes § 20–429(c).

(e)

General Statutes § 20–429(f)

The plaintiff argues that he “substantially compl[ied]” with the requirements of the HIA, and even if he did not, the contract is enforceable under General Statutes § 20–429(f).  First, the court cannot conclude that there is “substantial compliance” with the requirements of the HIA when the contractor fails to meet the requirements of General Statutes §§ 20–429(a)(2) or (7).  “[T]he requirements of the HIA are mandatory and must be strictly construed ․ [T]he absence of [a completion date] constitutes a violation of the HIA that renders the contract unenforceable ․ Thus, the plaintiff is precluded from recovery against the defendants unless the plaintiff can establish that the defendants' invocation of the HIA as the basis for their repudiation of the contract was in bad faith.”  (Citations omitted.)  Rizzo Pool Co. v. Del Grosso, 232 Conn. 666, 680, 657 A.2d 1087 (1995).

The plaintiff's failure to meet the mandatory requirements of General Statutes §§ 20–429(a)(2) or (7) is also fatal to his alternative argument that, even if he did not meet the requirements of the HIA, the contract is nonetheless enforceable under General Statutes § 20–429(f).  The latter section provides that a contractor who complies with “subdivisions (1), (2), (6), (7) and (8) of subsection (a) of this section [may seek] recovery of payment for work performed based on the reasonable value of services which were requested by the owner, provided the court determines that it would be inequitable to deny such recovery.”   In support of his position, the plaintiff cites Walpole Woodworkers, Inc. v. Manning, 126 Conn.App. 94, 11 A.3d 165, cert. granted, 300 Conn. 940, 17 A.3d 476 (2011).⁶

General Statutes § 20–429(f) is a legislative amendment to the original HIA that was intended to address the harsh result that obtained when a contractor failed to meet certain HIA requirements.  Walpole Woodworkers, Inc. v. Manning, supra, 126 Conn.App. 104.  General Statutes § 20–429(f) “allows quantum meruit recovery in certain cases of partial noncompliance with subsection [20–429](a) ․ Thus, if a court determines that the requirements of subsection [20–429](f) are met, it may award damages under a theory of unjust enrichment even if all of the requirements of the [HIA] are not met.”   (Citation omitted;  internal quotation marks omitted.)  Newtown Pool Construction, LLC v. Errico, 103 Conn.App. 566, 569–70, 930 A.2d 50 (2007).

In this case, General Statutes § 20–429(f) does not permit the relief sought by the plaintiff.   This court found, supra, that the plaintiff did not meet his burden of proof regarding the requirements of General Statutes §§ 20–429(a)(2) or (7).   Since he did not comply with General Statutes §§ 20–429(a)(2) or (7), the remedy permitted by General Statutes § 20–429(f), by its terms, is not available to him.   See Walpole Woodworkers, Inc. v. Manning, supra, 126 Conn.App. 96–98.

Further, due to the existence of the HIA, the plaintiff may not proceed under a theory of unjust enrichment.   The HIA is a legislative creation intended “to abrogate the common-law right to recover for unjust enrichment under certain circumstances ․ [A] home improvement contract is not enforceable against a homeowner, either by way of an action for breach of contact or for unjust enrichment, unless the contract complies with the mandatory writing requirements of General Statutes § 20–429(a).”  (Citation omitted.)   Andy's Oil Service, Inc. v. Hobbs, 125 Conn.App. 708, 714–15, 9 A.3d 433 (2010), cert. denied, 300 Conn. 928, 16 A.3d 703 (2011).⁷

Even though General Statutes § 20–429(f) is not available to the plaintiff, he may, nonetheless, seek recovery from the defendants if he can establish that the defendants acted in bad faith.   The addition of General Statutes § 20–429(f) to the HIA does not “override the general principle embodied in the bad faith exception:  that an individual should not profit from his own deceptive and unscrupulous conduct.   This court never intended to advance the cause of the unscrupulous ․ We do not read subsection (f) to override the bad faith exception because it does not, by its terms, purport to address the defense of bad faith.   Rather, § 20–429(f) addresses the availability of restitutionary remedies to a contractor who performs work under a partially defective home improvement contract, regardless of whether the homeowner acted in bad faith.   Thus, a plaintiff contractor who enters into a contract for home improvement services but who does not comply with the act so that the contract is unenforceable has two potential avenues for recovery:  § 20–429(f) and the bad faith exception.   The former avenue was created by the legislature, while the latter was judicially created.”  (Citation omitted;  internal quotation marks omitted.)  Walpole Woodworkers, Inc. v. Manning, supra, 126 Conn.App. 104–05.

2

Weitzman's Liability

Before turning to the question of whether the defendants acted in bad faith, the court must address the question of whether Weitzman is subject to the claims brought by the plaintiff.   The plaintiff asserts that Weitzman is liable under either a breach of contract or unjust enrichment theory.

The contract describes the “customer” as “David Adler,” it refers to the “client” in the singular,⁸ and it carries only Adler's signature on the line designated “homeowner.”   Although the contract does not refer to Weitzman in any way, the plaintiff argues that Weitzman jointly owned the real property at issue.   Adler testified that Weitzman had the authority to issue work or change orders, that she was intimately involved in the renovation project, that she ratified Adler's conduct and that the work was done for her benefit.

The contract, however, does not bind the “owner” of the property.   It binds only the “customer,” who is identified in the contract as David Adler.   Our Supreme Court has made clear that “only parties to contracts are liable for their breach.  [T]he obligation of contracts is limited to the parties making them, and, ordinarily, only those who are parties to contracts are liable for their breach.   Parties to a contract cannot thereby impose any liability on one who, under its terms, is a stranger to the contract, and, in any event, in order to bind a third person contractually, an expression of assent by such person is necessary.”  (Internal quotation marks omitted.)  FCM Group, Inc. v. Miller, 300 Conn. 774, 797, 17 A.3d 40 (2011).   In FCM Group, Inc. v. Miller, supra, 800–01, the court rejected a contractor's argument that the wife of the homeowner was liable on a contract between builder and the homeowner.   The court recognized that the homeowner's wife was authorized to communicate directly with the builder regarding the project;  id., 782;  and considered the plaintiff's claim that she was the “beneficial or equitable” owner of the property;  id., 797;  but nonetheless concluded that she was not bound by the contract to which she was not a signatory.  Id., 800–01.   The agency argument that the plaintiff advances in this case cannot succeed.   Even if the plaintiff establishes that Weitzman acted as agent for Adler when giving directions to the plaintiff, any agency relationship Weitzman may have had relative to Adler will not serve to make her liable for breach of a contract to which she was not a party.   See id., 800 n.24. This court concludes that Weitzman is not liable to the plaintiff under any of his three theories:  breach of contract, equitable ownership ⁹ or agency.

Bad Faith

The question of whether the plaintiff can seek recovery under a claim of bad faith by Adler turns upon the application of well-established principles.   The basis for the bad faith exception is recognition of the fact that “to allow the homeowner who acted in bad faith to repudiate the contract and hide behind the act would be to allow him to benefit from his own wrong, and indeed encourage him to act thusly.   Proof of bad faith therefore serves to preclude the homeowner from hiding behind the protection of the act.”  (Internal quotation marks omitted.)  Lucien v. McCormick Construction, LLC, 122 Conn.App. 295, 300, 998 A.2d 250 (2010).   Bad faith involves “actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive ․ Bad faith means more than mere negligence;  it involves a dishonest purpose ․ It is the burden of the party asserting the lack of good faith to establish its existence and whether that burden has been satisfied in a particular case is a question of fact.”  (Citation omitted;  internal quotation marks omitted.)  Id., 300.

It is in light of the foregoing principles that the court evaluates the conduct of the parties in this case.   The parties' relationship began to strain in early March 2008 when Adler started asking for a detailed explanation of the charges associated with the project.   At that point, the cost had more than doubled beyond the original $400,000 figure that the parties discussed originally.   However, even though Adler continued to send checks as requested from the period of October 2007, through March 2008, and even though their total far exceeded the original $400,000 estimate, there is no evidence that Adler ever sought copies of bills, invoices, receipts or any other accounting except asking the plaintiff to list the expenses, which the plaintiff did in a single, two-page document.   PX 52.   That document was entitled, “Upcoming Expenses,” and showed that the expenses would, at that point, total nearly $300,000.   PX 52 also showed that the current expenditures on the project totaled $521,944, and that Adler had paid $365,000, leaving a balance owed—separate from any future expenses—of $156,944.

Notwithstanding the foregoing mushrooming expenses, Adler along with Weitzman, Weitzman's assistant and the architect continued to assign tasks to the plaintiff without making corresponding inquiries regarding the expenses associated with those tasks.   The following is a representative sample of work orders that followed Adler's mid-March inquiry regarding the project cost:

1.  March 27, 2008.   Weiner inquired regarding the specifications for under-shelf lighting.   PX 55;

2.  March 27, 2008.   Weiner sent drawings for bathroom hardware locations, noting that hardware specifications would follow.   PX 56;

3.  April 1, 2008.   Adler advised the plaintiff that Adler was sending one thousand feet of speaker wire to be delivered the following day so that audio speakers could be installed in multiple locations throughout the house.   PX 58;

4.  April 4, 2008.   Slotnick inquired as to whether the plaintiff would be repairing a foundation wall.   PX 61;

5.  April 6, 2008.   Adler sent the plaintiff specifications for the installation of a range hood.   PX 62;

6.  April 10, 2008.   Adler inquired as to how quickly the kitchen cabinets would be installed because that had to be done before templates for the countertops could be created, and also provided specifications for an under counter wine storage refrigerator.   PX 63;

7.  April 14–15, 2008.   Adler and the plaintiff exchanged messages about numerous aspects of work on the project, including Adler's plan to install a “plasma” on the wall in the “xbox” room.   PX64;

8.  April 16, 2008.   Weitzman advised the plaintiff that instead of marble for the fireplaces she had decided that she wanted to use a stone called “pietra cardoza.”   PX 65.

The court is unable to find any timely inquiry of any kind, from Adler or any other person authorized to assign tasks to the plaintiff, regarding the expense associated with any of the foregoing job orders.   This pattern continued through May 2008.   On May 23, 2008, the plaintiff advised Adler of extra items that had not been “priced and/or figured as there where [sic] some last minute changes as we near the end.”   PX 79.   The latter message reminded Adler that the plaintiff would have debts to subcontractors.   On May 27, 2008, the plaintiff advised Adler that the project cost had grown to $886,954, but that other items were still to be completed and those costs were not included in the latter figure.   PX 81.   In that message, the plaintiff advised Adler that subcontractors were requesting payment for their work, and that he was “very much” in arrears at that time and required “a substantial payment” to meet those debts.  Id.

After the May 27, 2008 message, work orders continued to flow to the plaintiff, directing him to handle furniture delivery and assembly, as well as larger tasks, such as the possible installation of mahogany for the deck, and also urging the plaintiff to complete a dock so that it would be operational when Adler's children returned from camp.   That message noted that Adler was wiring a $40,000 payment to the plaintiff.   PX 99.   Adler sent additional work requests to the plaintiff on July 28, 2008, advising him, inter alia, that “we definitely need a boat/kayak holder—it should hold 3 kayaks and 1 canoe.”   PX 102.

The plaintiff sent a final bill on August 28, 2008, showing a total cost of $1,188,350, payments of $985,000 and a balance due of $203,350.   On September 3, 2008, Adler advised the plaintiff that he believed he had paid everything that he owed.   Adler told the plaintiff that he required additional justification “before I consider any additional payments to you ․” He acknowledged that the plaintiff was indebted to subcontractors, and noted that the plaintiff had not begun to address the “100+ punchlist we have provided to you.   We have been very happy with the quality of your work generally and it is my hope that we can resolve this matter amicably.”   PX 107.

The plaintiff responded with detailed explanations of the costs associated with the project.   PX 108, 110, 111, 112.   He made abundantly clear to Adler that he was significantly indebted to subcontractors.   PX 111, 112.   As early as September 9, 2008, Adler was seeking an attorney to address his financial disagreement with the plaintiff.   PX 125.

On September 16, 2008, Adler advised the plaintiff that “[w]e are at the end of the road.”   Adler claimed that he had spent many hours reviewing the plaintiff's explanations and had “concluded that I do not owe you any additional amounts.”   He advised the plaintiff that he would be hiring a new contractor to complete items on the punch list, and he invited the plaintiff to bring suit, warning him that “[a]s an attorney I expect to represent myself.   If you choose to commence litigation, I will seek reimbursement from you for the costs of completing the punch list ․ We are officially and immediately terminating our relationship.”   PX 113.   This message constituted a termination of the agreement between the parties.   See Carroll v. Perugini, 83 Conn.App. 336, 341, 848 A.2d 1262 (2004).

Despite the foregoing, Adler continued to ask the plaintiff to work on the project.   On September 17, 2008, Adler gave the plaintiff permission to enter the house to work on the punch list.   On September 24, 2008, Adler sent the plaintiff a detailed list of punch list items that he wanted the plaintiff to complete, noting that he was “anxious to get all of these items done ․” PX 114.   On October 7, 2008, Adler inquired further as to the plaintiff's progress on the punch list, noting that he did not want the plaintiff working on the punch list during an upcoming weekend when Adler and his family would be using the house.   PX 116.   Shortly thereafter, Adler received notice of the service of a mechanic's lien and, for that reason, Adler barred the plaintiff from the premises, and Adler advised the plaintiff that another contractor would be hired to do further work.  Id.

It is readily apparent to the court that when Adler made his final payment on August 4, 2008, he had no intention of ever making any further payments.   Adler received detailed explanations for the charges from the plaintiff but offered no detailed response, other than to claim that he had reviewed the plaintiff's reports and disagreed with them.   Adler knew that many subcontractors were working on the project and that the plaintiff was indebted to them.   Adler knew that the plaintiff had purchased significant materials for the project and that the plaintiff was indebted to the suppliers.   Further, both Adler and the plaintiff knew that by August 4, 2008 the project was largely complete.   Thus, even if Adler elected not to pay the plaintiff for the work done to that point, the project itself was not at risk, since Adler could easily get another contractor to finish the tasks that remained, which is what happened.   Therefore, it did not really matter if Adler could not trick the plaintiff into finishing the entire punch list which, again, is what happened.

A person of significantly less sophistication than Adler would have known that the end-of-project billing dispute that mushroomed in August and September of 2008 created a serious risk of putting the plaintiff out of business if Adler did not pay the bills that he owed.   In fact, that is exactly what happened at some point after the plaintiff filed his mechanic's lien.   It was the plaintiff's fear of losing his business that gave Adler enormous leverage over the plaintiff, thus compelling the plaintiff to go on working for Adler, hoping against hope—vainly, as it turned out—that Adler would ultimately pay the plaintiff for all of his work.

The messages between Adler and the plaintiff reflect a homeowner who knew, and took advantage of the fact, that his contractor had limited assets and desperately needed to be paid.   As late as September 2008, Adler assured the plaintiff that the defendants were satisfied with the quality of the plaintiff's work, and Adler then implied that he might make further payments to the plaintiff, thereby inducing the plaintiff to continue to work for Adler.   See PX 107.   The entire project was marked by Adler's indifference to the manner in which work orders were given to the plaintiff;  indeed, Adler did not even know what all of those orders were.   Adler's messages to the plaintiff focused almost exclusively on the work to be done and the speed with which it could be done.   Adler seldom inquired as to the expense involved.   His disinterest in managing the project costs causes the court to reject his claim that charges beyond the amount he chose to pay were unwarranted.

The factual situation in this case is similar to that presented in Walpole Woodworkers, Inc. v. Manning, supra, 126 Conn.App. 94.¹⁰  In Walpole Woodworkers, Inc. v. Manning, supra, 101, the contractor completed the work, but the homeowner delayed payment.   When pressed about the delay, the homeowner claimed that there was a defect in the work, causing the contractor to provide a “free fix” to remedy the problem.  Id. Nonetheless, after the contractor did the additional work, the homeowner still declined to pay for it.  Id. The homeowner testified that he “simply decided he would not pay the balance due on the contract.”  Id., 101–02.   This, the court concluded, constituted bad faith.  Id., 102

Adler unilaterally and arbitrarily selected a price that he was willing to pay for the project.   He had agreed to a time and materials contract, but eventually decided, without a sound factual basis, that he would not pay for all of the time and materials expended on the project.   Thereafter, having decided to make no further payments after August 4, 2008, Adler enticed the plaintiff into continuing to do work for him, using a “carrot and stick” approach.   After the last payment was made on August 4, 2008, Adler's actions suggested to the plaintiff that perhaps Adler could be convinced that the additional charges were valid.   For many weeks after making the August 4, 2008 payment, Adler attempted to convince the plaintiff to complete the punch list, which consisted of more than one hundred items.   At the same time that Adler was encouraging the plaintiff to go on working for him, Adler was concomitantly suggesting to the plaintiff that if the plaintiff was contemplating legal action to recover the monies he was claiming, Adler would represent himself, thus signaling that there would be no expense to Adler in defending or bringing a lawsuit, yet implicitly reminding the plaintiff that he, unlike Adler, would have to bear the expense associated with retaining counsel to obtain redress.   Adler knew, from his communications with the plaintiff, that the plaintiff was in difficult economic straits at that point.

When viewed in light of all the circumstances, the court concludes that Adler's approach constituted a design to mislead and/or deceive the plaintiff.   Further, Adler's decision to continue to encourage the plaintiff to work for him after August 4, 2008, knowing that Adler would not be making any further payments to the plaintiff, constituted a neglect and/or a refusal to fulfill Adler's contractual obligations to the plaintiff.

The court, having had ample opportunity to observe the conduct, demeanor and attitude of the witnesses, to evaluate the testimony and to relate the testimony of each witness to the exhibits in the case, concludes that Adler's decision to make no further payments after August 4, 2008, was not prompted by an honest mistake as to his rights or duties.   Instead, this decision was the product of Adler's desire to use the plaintiff to finish the project at no further expense to Adler.   The latter approach was faster, more efficient and vastly more economical than concluding the relationship with the plaintiff and retaining a new contractor.   Thus, it was a course of conduct that was the product of Adler choosing to serve his own financial interests at the plaintiff's expense.   Indeed, the latter conclusion is something of an understatement considering the fact that Adler's course of action served to put the plaintiff out of business.  “Bad faith means more than mere negligence;  it involves a dishonest purpose.”  (Internal quotation marks omitted.)  Lucien v. McCormick Construction, LLC, supra, 122 Conn.App. 300.

Adler was not honest with the plaintiff when Adler suggested, after August 4, 2008, that he might make the additional payments that the plaintiff needed to pay his subcontractors and materials suppliers.   The plaintiff has met his burden of establishing bad faith by Adler.   See Andy's Oil Service, Inc. v. Hobbs, supra, 125 Conn.App. 715–16.

4

Motion to Amend the Complaint, Post–Trial

In his complaint, the plaintiff alleged that the defendants are indebted to him in the amount of “$214,039.09, plus accrued interest on such sum, plus attorneys fees and costs incurred in the collection of such sum per the express terms of the contract referenced herein.”   Revised Compl., count two, ¶ 18.   In his post-trial brief, the plaintiff recalculated his claim as to the amount owed to him, arguing that the evidence shows that he was entitled to $1,244,178.80 for the work that he did on the project.   When the defendants' payment of $985,000 is subtracted from the latter figure, the plaintiff's claim becomes $259,178.80, a figure that is $45,138.91 larger than the amount alleged in the complaint.   The plaintiff moved, post-trial, to amend the complaint to conform to the proof.   Pl.'s Mem. 26 n.7.

The question of whether the plaintiff should be allowed to amend his complaint post-trial is a matter left to the court's discretion.  “While our courts have been liberal in permitting amendments ․ this liberality has limitations.   Amendments should be made seasonably.   Factors to be considered in passing on a motion to amend are the length of delay, fairness to the opposing parties and the negligence, if any, of the party offering the amendment ․ Although Practice Book § 178 [now Practice Book § 10–62] provides that ‘[in] all cases of any material variance between allegation and proof, an amendment may be permitted at any stage of the trial,’ our Supreme Court has often held that the word ‘may’ is discretionary and not mandatory.”  (Citations omitted;  internal quotation marks omitted.)  Rosick v. Equipment Maintenance & Service, Inc., 33 Conn.App. 25, 33–34, 632 A.2d 1134 (1993);  see Billy & Leo, LLC v. Michaelidis, 87 Conn.App. 710, 713–14, 867 A.2d 119 (2005).

In this case, by his own admission, the plaintiff's billing records were poorly maintained.   It was apparent to the court that preparing this case for trial, and trying it, was challenging for the parties.   The court finds that much of the difficulty in preparing this case for trial, trying this case and determining the appropriate resolution of the dispute can be traced directly to the plaintiff's failure to maintain better records.   Indeed, the existence of the lawsuit itself is undoubtedly tied to the plaintiff's administrative shortcomings.   Just as the parameters of the renovation project was a constantly moving target, the precise calculation of the plaintiff's expenses was a difficult exercise, the correct resolution of which is a matter upon which the parties vehemently disagree.

To allow the plaintiff to assert larger damages posttrial than he alleged in his complaint would be unfair to the defendants and it would improperly reward the plaintiff for his negligent record keeping.   The motion to amend the complaint to conform to the proof is denied.

5

Damages

Having concluded that the “bad faith” exception to the HIA applies in the case, the issue next presented is the amount of damages available to the plaintiff.   When recovery is available pursuant to the bad faith exception of the HIA, the plaintiff is not entitled to recover interest, costs or attorneys fees.  Walpole Woodworkers, Inc. v. Manning, supra, 126 Conn.App. 102.   Rather, in such a situation “the plaintiff is entitled only to recover the value of the work performed because the contract is otherwise unenforceable due to the plaintiff's violation of the [HIA].” Id.

Our Supreme Court has set forth the principles that must be considered in order to determine the appropriate damage calculus in a breach of contract action.  “It is axiomatic that the sum of damages awarded as compensation in a breach of contract action should place the injured party in the same position as he would have been in had the contract been performed ․ The injured party ․ 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 also is well established that the burden of proving damages is on the party claiming them ․ When damages are claimed they are an essential element of the plaintiff's proof and must be proved with reasonable certainty.”  (Citation omitted;  internal quotation marks omitted.)  FCM Group, Inc. v. Miller, supra, 300 Conn. 804.

The parties agreed that Adler would pay for all materials, all fees required “to perform the above services,” and “$45 per man plus any expenses to include dumpsters.   And or materials. [sic]” The contract is obviously ambiguous as to the precise meaning of the latter phrase.   The evidence leads the court to conclude that both parties understood the phrase to mean that the defendants would be charged $45 per hour for work done by the plaintiff and any crew members working under him.   Further, the court finds that both parties understood the phrase to mean that the defendants would be responsible for any additional expenses on the project, including dumpsters and materials needed for the project.

The plaintiff presented credible evidence, which the court does credit, indicating that the value of the plaintiff's work on the project, the value of the work of the crew members and subcontractors who worked under his supervision, and the cost of materials and associated expenses exceeds, not only the $985,000 paid by the defendants, but also the $214,039 in damages claimed in the complaint.¹¹  However, since the plaintiff's damage recovery is limited to the allegations in his complaint, the court awards the plaintiff $214,039.09 in damages, as alleged in count two of the complaint.   This award is recoverable against David Adler.   Defendant Amie Weitzman is not liable to the plaintiff and, therefore, the court finds in favor of Amie Weitzman on all counts.   The first count, seeking foreclosure on the mechanic's lien, was bifurcated by agreement of the parties.   Therefore, the court will take no further action relative to the first count at this time.

6

The Counterclaim and Special Defenses

The defendants filed an amended answer, special defenses and counterclaim on November 15, 2010.   The defendants' first special defense alleges that the plaintiff's losses were due to his failure to mitigate such losses and damages.   There was no credible evidence offered at trial that permits a finding that the plaintiff could have done anything more than was done in order to mitigate his losses.   The first special defense is rejected.

The second special defense alleges unclean hands on the part of the plaintiff.   It is true that the doctrine of unclean hands, even though it is an equitable defense, may be raised in an action at law, including breach of contract.  General Statutes § 52–1;  see Delbuono v. Clifford Development, Superior Court, judicial district of Waterbury, Docket No. CV 06 5002937 (July 24, 2007, Upson, J.) (equitable doctrine of unclean hands available in breach of contract action);  see, e.g., Kerin v. Udolf, 165 Conn. 264, 334 A.2d 434 (1973) (equitable defense permitted in action at law).   In the present case, however, the court does not find that the plaintiff has unclean hands.   The court has found that the plaintiff was careless, even negligent, in his record keeping, but the court does not find that he was dishonest.  “Bad faith means more than mere negligence;  it involves a dishonest purpose.”  Habetz v. Condon, 224 Conn. 231, 237, 618 A.2d 501 (1992).

On the contrary, the court has found that Adler engaged in bad faith in his dealings with the plaintiff, and it is, thus, Adler who comes to this court with unclean hands.   See Infinity Insurance Co. v. Worcester Insurance Co., Superior Court, judicial district of Hartford, Docket No. CV 02 0817023 (March 18, 2005, Langenbach, J.) (39 Conn. L. Rptr. 72).   The second special defense is rejected.

The third, fourth, fifth and sixth special defenses all depend on the defendants' belief that they should be accorded relief pursuant to various provisions of the HIA. The court addressed the application of the HIA, supra, in a manner favorable to the plaintiff.   The third, fourth, fifth and sixth special defenses do not preclude the relief awarded to the plaintiff.

The defendants also brought a four-count counterclaim.   The first count alleges a violation of CUTPA, based on the defendants' claim that the plaintiff is in violation of the HIA. General Statutes § 20–427(c) provides in relevant part that “[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.”   However, to recover under such a claim, the defendants must prove that the plaintiff's failure to comply with any of the requirements of the HIA constituted an unfair or deceptive trade practice.  New England Custom Concrete, LLC v. Carbone, 102 Conn.App. 652, 666, 927 A.2d 333 (2007).   They must also produce evidence of the damages that they suffered as a result of the HIA violations.  Id.

The defendants offered no credible evidence that the plaintiff's failure to draft a contract which included all of the information required by the HIA caused them any damage.   The defendants showed indifference to the HIA, the terms of the contract and the requirement that change orders be written and signed.   The court has found that it was not the plaintiff, but rather the defendants who caused the escalation of the costs of the project.   Thus, the defendants did not make the necessary showing that the plaintiff engaged in unfair or deceptive practices, nor did they establish that they suffered damage as a result of the HIA violations.   In view of the defendants' failure to meet the requirements precedent to a recovery under CUTPA, the court finds that there is no basis on which to award attorneys fees to the defendants.   See id., 666–67.

The second count of the counterclaim alleges negligence.   The defendants claim that the plaintiff's work was improperly and incompetently carried out, that he did not properly install flashing, that he failed to properly install a water shield product, that he did not properly staff the project and that he did not properly supervise his crew.

The court finds that the plaintiff performed his contractual obligations in a workmanlike fashion.   For example, the evidence that the deck planking more effectively drained water when the planks had one-quarter inch spacing, as opposed to one-eighth inch spacing, is more akin to a preference than a showing of negligence.   Similarly, the evidence regarding deck, window and door flashing is, at best, equivocal.   There was evidence presented that the defendants' architect advised Adler that she did not observe flashing.   PX 123.   There is no evidence that the defendants considered this finding to be significant.   The defendants did not introduce evidence that they have taken any action in the last four years to address any alleged shortcomings regarding flashing.   The defendants have not established that the house has been damaged in any material way as a result of the alleged defective window, deck or door installations.

In fact, as late as September 3, 2008 Adler told the plaintiff that “[w]e have been very happy with the quality of your work generally and it is my hope that we can resolve this matter amicably.”   PX 107.   This comment, alone, belies the integrity of the defendants' counterclaim.   The integrity of the defendants' claim of negligent workmanship is further compromised by the fact that, despite the March 28, 2008 email from the defendants' architect regarding alleged problems with the flashing, the defendants made no claim of defective workmanship when the plaintiff filed suit in December 2008.   When they first answered the complaint in August 2009, the defendants included a counterclaim, but that counterclaim did not include allegations of negligence against the plaintiff.   It was not until the defendants filed an amended answer and counterclaim on November 15, 2010, more than two and one-half years after the production of PX 123, that they made a claim of negligence.   The defendants have not met their burden of proof with regard to the second count of their counterclaim.

Count three of the counterclaim sounds in breach of contract and is rejected for the reasons previously stated in this memorandum of decision.   Count four of the counterclaim sounds in unjust enrichment and is also rejected for the reasons previously stated in this memorandum of decision.

IV

CONCLUSION

In summary, the court finds for the plaintiff and against defendant Adler, on count two of the complaint in the amount of $214,039.09.   The court finds in favor of defendant Weitzman on all counts of the complaint against her.   The court finds against the defendants on all counts of their counterclaim.

So ordered.

John A. Danaher III

FOOTNOTES

FN1. Lakeville is a village in the town of Salisbury, Connecticut.   See The State v. Powers, 25 Conn. 48, 50 (1856) (courts may take judicial notice of the geographical division of counties and the towns within them)..  FN1. Lakeville is a village in the town of Salisbury, Connecticut.   See The State v. Powers, 25 Conn. 48, 50 (1856) (courts may take judicial notice of the geographical division of counties and the towns within them).

FN2. Salisbury Bank and Trust Company is a non-appearing defendant.   All references to the “defendants” throughout this opinion are references to Adler and Weitzman.   The plaintiff alleges that Salisbury Bank and Trust is named as a defendant because it holds a $1,800,000 mortgage on the property that is the subject of the mechanic's lien foreclosure allegations that are set forth in the first count of the complaint..  FN2. Salisbury Bank and Trust Company is a non-appearing defendant.   All references to the “defendants” throughout this opinion are references to Adler and Weitzman.   The plaintiff alleges that Salisbury Bank and Trust is named as a defendant because it holds a $1,800,000 mortgage on the property that is the subject of the mechanic's lien foreclosure allegations that are set forth in the first count of the complaint.

FN3. Presumably Adler was referring to “quarter-sawn flooring.”.  FN3. Presumably Adler was referring to “quarter-sawn flooring.”

FN4. The plaintiff testified that, on one occasion, he requested a check for $150,000..  FN4. The plaintiff testified that, on one occasion, he requested a check for $150,000.

FN5. The defendants' position on the “fixed price” issue turns in many different directions.   At trial, Adler claimed that he had a written fixed price contract when he received the plaintiff's budget estimate of March 15, 2008, PX 52.   Trial Tr., 81–82, 86–87:1–8, November 4, 2011.   Adler then testified that the plaintiff's cost breakdown, dated May 27, 2008;  PX 81;  constituted yet another fixed price contract.   Trial Tr., 91:  8–16, November 4, 2011.   In his brief, however, Adler claims that the parties never entered into a written contract for the renovation phase of the project.   Defs.' Mem. 5, 7. In his reply brief, Adler argues that Adler did not testify that he had a fixed price contract for the renovation phase, claiming that PX 81 was the fixed price for an oral contract and not, itself, a fixed price contract.   Defs.' Reply Mem. 5–6.   The evidence does not (indeed, literally cannot) support these varied and tortured claims..  FN5. The defendants' position on the “fixed price” issue turns in many different directions.   At trial, Adler claimed that he had a written fixed price contract when he received the plaintiff's budget estimate of March 15, 2008, PX 52.   Trial Tr., 81–82, 86–87:1–8, November 4, 2011.   Adler then testified that the plaintiff's cost breakdown, dated May 27, 2008;  PX 81;  constituted yet another fixed price contract.   Trial Tr., 91:  8–16, November 4, 2011.   In his brief, however, Adler claims that the parties never entered into a written contract for the renovation phase of the project.   Defs.' Mem. 5, 7. In his reply brief, Adler argues that Adler did not testify that he had a fixed price contract for the renovation phase, claiming that PX 81 was the fixed price for an oral contract and not, itself, a fixed price contract.   Defs.' Reply Mem. 5–6.   The evidence does not (indeed, literally cannot) support these varied and tortured claims.

FN6. As is readily apparent from the fact that our Supreme Court has granted certiorari in Walpole Woodworkers, Inc. v. Manning, the holdings in the Appellate Court decision are currently sub judice.   However, as of the date of this memorandum of decision, our Supreme Court has not released its opinion in Walpole Woodworkers, Inc. v. Manning.   Until the Supreme Court issues an opinion, this court is bound by the Appellate Court decision.  “A trial court is required to follow the prior decisions of an appellate court to the extent that they are applicable to facts and issues in the case before it, and the trial court may not overturn or disregard binding precedent.”  Potvin v. Lincoln Service & Equipment Co., 298 Conn. 620, 650, 6 A.3d 60 (2010)..  FN6. As is readily apparent from the fact that our Supreme Court has granted certiorari in Walpole Woodworkers, Inc. v. Manning, the holdings in the Appellate Court decision are currently sub judice.   However, as of the date of this memorandum of decision, our Supreme Court has not released its opinion in Walpole Woodworkers, Inc. v. Manning.   Until the Supreme Court issues an opinion, this court is bound by the Appellate Court decision.  “A trial court is required to follow the prior decisions of an appellate court to the extent that they are applicable to facts and issues in the case before it, and the trial court may not overturn or disregard binding precedent.”  Potvin v. Lincoln Service & Equipment Co., 298 Conn. 620, 650, 6 A.3d 60 (2010).

FN7. The court, therefore, must find in favor of the defendants on the third count, which sounds in unjust enrichment..  FN7. The court, therefore, must find in favor of the defendants on the third count, which sounds in unjust enrichment.

FN8. The “client” is not otherwise identified in the contract..  FN8. The “client” is not otherwise identified in the contract.

FN9. See n.7, supra..  FN9. See n.7, supra.

FN10. The defendants did not address Walpole Woodworkers, Inc. v. Manning, supra..  FN10. The defendants did not address Walpole Woodworkers, Inc. v. Manning, supra.

FN11. The defendant challenges the plaintiff's damage claim, suggesting, e.g., that the plaintiff did not work all of the hours claimed.   The court rejects the defendants' challenges.   The evidence is clear that the plaintiff dedicated himself to the defendants' project in order to meet the urgent deadlines imposed by the defendants.   It is not necessary to further address this issue because the court finds that the plaintiff established damages in excess of the $214,039 claimed in his complaint..  FN11. The defendant challenges the plaintiff's damage claim, suggesting, e.g., that the plaintiff did not work all of the hours claimed.   The court rejects the defendants' challenges.   The evidence is clear that the plaintiff dedicated himself to the defendants' project in order to meet the urgent deadlines imposed by the defendants.   It is not necessary to further address this issue because the court finds that the plaintiff established damages in excess of the $214,039 claimed in his complaint.

Danaher, John A., J.