Pamela Thomas v. LLC (2012)

MEMORANDUM OF DECISION

These are companion actions in which plaintiff, Malek Construction, LLC (“LLC”), seeks to foreclose a mechanic's lien against defendant, Pamela Thomas (“Thomas”), arising from the construction of a new home on real estate owned by Thomas pursuant to a written contract to build executed by plaintiff, Seth Malek, d/b/a Malek Construction (“Malek”), and Thomas, dated April 8, 2008.   Malek seeks money damages from Thomas by way of unjust enrichment claiming that Thomas failed to pay Malek the full costs of the construction of the home.   Thomas denies that she owes any money to Malek and has brought a separate action seeking a discharge of the mechanic's lien.   She also has filed counterclaims against Malek in Malek's action claiming that the home was not constructed in accordance with her construction plan and seeking damages for the cost to complete construction of the home, including the cost of reconstruction of portions of the home which were done incorrectly or not in accordance with the plan.

I. Special Defenses

Thomas has filed seven special defenses to the plaintiffs' claims.   In the first and sixth special defenses she claims that the plaintiff has no standing to pursue this claim and that the mechanic's lien is invalid because the plaintiff had no contract with Thomas and nothing is owed to the plaintiff.   This court has previously denied an application by Thomas to discharge or reduce the mechanic's lien placed by LLC on her property on the basis that, although an improper name was used in the mechanic's lien certificate, the mistake was made in good faith and no resulting prejudice was claimed by Thomas.   However, Malek testified that LLC was not a party to the contract with Thomas and Thomas owes no money to LLC. Accordingly, the court grants Thomas' first and sixth special defenses as to LLC.

Thomas' second special defense claims that any contract that exists violates the Connecticut Unfair Trade Practices Act. Thomas offered no evidence to support this claim and the court denies the second special defense.

Thomas' third and fourth special defenses claim that Malek is an unregistered contractor under the New Home Construction Contractors Act and cannot recover and has unclean hands.   Malek was registered under the act.   Moreover, although violations of the act may result in criminal penalties under CGS § 20–417e and/or civil penalties under CGS § 20–417f, there is no provision in the act invalidating a construction contract for failure of a contractor to comply with the act.   In D'Angelo Development & Construction Co. v. Cordovano, 278 Conn. 237, 248 (2006), the Supreme Court, after a thorough analysis of the act, concluded that “the legislature did not intend to render noncomplying contracts unenforceable under the New Home Construction Contractors Act.” Accordingly, the court denies Thomas' third and fourth special defenses.

Thomas' fifth special defense claims that the plaintiffs are collaterally estopped from this claim because they represented that it was the d/b/a for Seth Malek both to Thomas and the Bank of America.   Thomas offered no evidence to support a claim of collateral estoppel and the court denies Thomas' fifth special defense.

Thomas' seventh special defense claims that Thomas has claims and offsets in excess of the plaintiffs' claims.   This special defense is a matter of evidence which the court has heard.

II. Claims and Counterclaims

The court makes the following findings on the claims and counterclaims in this matter.

A. Malek's Claims

The contract price for the home under the contract entered into by the parties was $238,250.00.   Thomas paid a total of $147,477.00 on account of the contract price, leaving an unpaid balance of $90,773.00 on the contract.   Malek claims that extras of $6,300.00 were performed on the house.   However, only $1,180.00 of such extras were authorized by Thomas and, under the contract, only $1,180.00 may be recovered by Malek.   Accordingly, the court finds that $91,953.00 is payable under the contract.

B. Thomas' Counterclaims

Thomas incurred expenses of $10,300.00 for work required to obtain a Certificate of Occupancy for the home and paid subcontractors a total of $6,935.00 to complete work which Malek did not do on the home.   She also will be required to spend $10,000.00 to complete construction of items which remain unfinished in the home.

In addition to the above expenditures made, or required to be made in the future, by Thomas, she claims that construction expenditures in the total amount of $234,715.00 will be required to conform the home to the construction plan.   Her claim includes correction of a four-inch deficit in the height of the basement by the expenditure of $65,000.00, $15,000.00 to raise the basement and $50,000.00 for fill to maintain the grade of the property.   The construction price of the home is $238,250.00, and, therefore, Thomas' claim of $234,715.00 almost equals the full price of the home.

In a situation such as presented in this case, the rule of damages is set forth in the Supreme Court case of Levesque v. D & M Builders, Inc., 170 Conn. 177, 181 (1976), as follows.  “For a breach of a construction contract involving defective or unfinished construction, damages are measured by computing either (i) the reasonable cost of construction and completion in accordance with the contract, if this is possible and does not involve unreasonable economic waste;  or (ii) the difference between the value that the product contracted for would have had and the value of the performance that has been received by the plaintiff, if construction and completion in accordance with the contract would involve unreasonable economic waste ․ A different method [of assessing damages] ․ is required to accomplish the ends of justice where the shortcomings are such as may be remedied and completion according to the contract had without substantial interference with the structure of the building, than where the remedy and completion involves substantial structural changes ․ In the latter case, the amount of ․ [damages] might be measured by the diminished value of the building to the owner by reason of the defects.”  (Citations and internal quotation marks omitted.)  Levesque involved a buyer who wanted to relocate a house misplaced by the builder.   The original contract cost was $22,600.00 and relocation costs were $10,000.00.   The trial court held that the proper measure of damages was the cost of relocating the house, even though that cost might appear disproportionately high.   The Supreme Court reversed the trial court and remanded the case to determine damages.

In Johnson v. Healy, 176 Conn. 97 (1978), the plaintiff sought $27,150.00 to construct a new foundation for a house originally purchased for $17,000.00.   The Supreme Court noted, at page 105, that in Levesque it adopted “a rule that limits damages to the diminished value of the building whenever the cost of repairs is dramatically larger than is the difference in value” and upheld the trial court's denial of the plaintiff's claim for $27,150.00.

In view of the above-cited cases, this is clearly a case which calls for the consideration of the diminution in value of Thomas' home resulting from Malek's failure to conform to the plans.   The parties have offered appraisals in evidence relating to such diminution in value.   The court has reviewed the appraisals submitted by the appraisers, evaluated their testimony and finds that the diminution of the home as a result of Malek's failure to conform to the construction plan is $34,000.

Accordingly, the court finds that $61,235.00 is due Thomas on her counterclaims.

Summary of Claims and Counterclaims

Contract price due plaintiff $238,250

Less amount paid by defendant 147,477

Balance due on contract price $ 90,773

Authorized extras 1,180

Total amount due plaintiff $ 91,953

Less defendant's counterclaims:

Expenses to obtain Certificate of Occupancy $ 10,300

Paid to subcontractors 6,935

Cost of work to be completed 10,000

Diminution in value of house 34,000

Total amount due defendant $ 61,235

Net amount due plaintiff $ 30,718

III

The court enters judgment for Seth Malek d/b/a Malek Construction in the amount of $30,718.00, without interest plus reasonable costs and enters judgment for Pamela Thomas discharging the mechanic's lien without interest plus reasonable costs.

Seymour L. Hendel, J.T.R.

Hendel, Seymour L., J.T.R.