Jeff Malich v. Mathew Sivilla et al. (2013)

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT # 108

I

ISSUES

(1) Whether the court should grant summary judgment for the defendants on the ground that there is no genuine issue of material fact that the plaintiff cannot enforce his contract against the defendant because it does not comply with the Home Improvement Act.

(2) Whether the court should grant summary judgment for Eleanor Sivilla on the ground that there is no genuine issue of material fact that she is not a party to the contract.

II

FACTS

This breach of contract action stems from alleged home-improvement work performed under contract by the plaintiff, Jeff Malich, for the defendants, Mathew Sivilla and Eleanor Sivilla.   The defendants have moved for summary judgment on the ground that there is no genuine issue of material fact that the contract is unenforceable because it does not comply with General Statutes § 20–429(a) of the Home Improvement Act, in that the contract contains neither a notice of the defendants' cancellation rights nor a start and completion date.   Additionally, Eleanor Sivilla has moved for summary judgment as to the breach of contract claim against her on the ground that there is no genuine issue of fact that she was not a party to any contract with the defendant.

The plaintiff has objected to the defendants' Home Improvement Act grounds for summary judgment, arguing that the defendants have acted in bad faith in using the Home Improvement Act to avoid paying just debts.   Although the plaintiff did not object in its memorandum in opposition to Eleanor Sivilla's individual motion for summary judgment, at short calendar, the plaintiff argued that Eleanor Sivilla was at the home watching and inspecting his work.

III

DISCUSSION

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Brooks v. Sweeney, 299 Conn. 196, 210, 9 A.3d 347 (2010).  “[T]he moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ․ To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].”  (Internal quotation marks omitted.)   Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 11, 938 A.2d 576 (2008).

In this motion, (A) both defendants have moved for summary judgment on the ground that there is no genuine issue of material fact that the plaintiff's noncompliance with § 20–429(a) renders the contract invalid and unenforceable and the defendants are therefore entitled to judgment as a matter of law and (B) Eleanor Sivilla has moved for summary judgment on the ground that there is no genuine issue of material fact that she is not a party to the contract and is therefore entitled to judgment as a matter of law as to the breach of contract cause of action against her.

A

The Home Improvement Act and Bad Faith

The defendants have moved for summary judgment on the ground that the two contracts are invalid and unenforceable because the plaintiff did not comply with General Statutes § 20–429(a).   The plaintiff concedes that the contracts do not comply with § 20–429(a) because neither contract contains a start or finish date or a notice of cancellation rights.   Nevertheless, the plaintiff argues that the defendants are not entitled to judgment as a matter of law because there remains a genuine issue of material fact as to whether the defendant acted in bad faith in asserting § 20–429(a).   The defendants reply by arguing that, as the plaintiff has not established a factual predicate for his bad faith claims, summary judgment must be granted.

Section 20–429 provides in relevant part:  “No home improvement contract shall be valid or enforceable against an owner unless it ․ contains a notice of the owner's cancellation rights in accordance with the provisions of chapter 740 ․ [and] contains a starting date and completion date ․” Nevertheless, “a contractor, otherwise precluded from recovering moneys owed for his work because of a violation of the act, must be permitted to assert that the homeowner's bad faith precludes him from safely repudiating the contract and hiding behind the act in order to bar the contractor's recovery.”  Habetz v. Condon, 224 Conn. 231, 238, 618 A.2d 501 (1992).   The Connecticut Supreme Court has “defined bad faith as involving 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 ․ In other words, [b]ad faith means more than mere negligence;  it involves a dishonest purpose.”  (Citation omitted;  internal quotation marks omitted.)  Wadia Enterprises, Inc. v. Hirschfeld, 224 Conn. 240, 248, 618 A.2d 506 (1992).

Ultimately, “[i]t 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.”  Habetz v. Condon, supra, 224 Conn. 237, n.11. Our Supreme Court has provided the standard for determining whether summary judgment must be denied because a defendant's bad faith precludes that defendant from repudiating a contract by asserting the contract does not comply with § 20–429.  “Although the party seeking summary judgment has the burden of showing the nonexistence of any material fact ․ it [is] incumbent upon the party opposing summary judgment to establish a factual predicate from which it can be determined, as a matter of law, that a genuine issue of material fact exists ․ The presence ․ of an alleged adverse claim is not sufficient to defeat a motion for summary judgment.”  (Citations omitted;  internal quotation marks omitted.)  Wadia Enterprises, Inc. v. Hirschfeld, supra, 224 Conn. 247.

In Wadia Enterprises, the plaintiff “claim[ed] that it ha[d] raised a factual issue as to the defendants' bad faith attempt to use the act as both a sword and a shield to avoid final payment to the plaintiff.   The plaintiff ․ submitted [the following evidence] in opposition to the defendants' motion for summary judgment:  the defendants prepared the underlying defective contract through their New York attorneys and architect and then relied on the same contract as a defense to its enforcement;  the defendants certified payments and retained five percent;  despite certification by their agent, the defendants refused to make final payment, alleging rights in the contract they now seek to repudiate;  the defendants withheld one-half of the payments pursuant to the contract;  the defendants forced the plaintiff to extend credit for change orders under provisions of the contract they now seek to repudiate;  the defendants enforced the delay damages clause and alleged breach of specific parts of the very contract they seek to repudiate.”  Id., 248.   The court, in granting summary judgment for the defendants, reasoned that “[n]one of these facts ․ indicates a dishonest purpose.   The fact that the defendants had their architect and New York attorneys draft the contract does not in and of itself indicate bad faith on the part of the defendants.   There is no allegation or proof that the attorneys intentionally omitted this requirement in order to have an escape hatch.   At most, the New York attorneys were negligent in failing to consult Connecticut law and to include the required clause in the contract.   An honest mistake does not rise to the level of bad faith.”

The court further reasoned:  “The essence of the remainder of the plaintiff's allegations is that the defendants acted in bad faith by initially enforcing the contract and subsequently asserting the contract's invalidity as a defense to a suit by the contractor.   This contention does not, by itself, present a claim of bad faith.   There is nothing dishonest or sinister about homeowners proceeding on the assumption that there is a valid contract, enforcing its provisions, and later, in defense to a suit by the contractor, upon learning that the contract is invalid, then exercising their right to repudiate it ․ [T]he plaintiff did not allege that the defendants knew of the violation earlier, or that they purposely drafted the contract in violation of the act in order later to avoid their obligation to pay.   On the contrary, the plaintiff did not even challenge the defendants' statements in their affidavits that they had been unaware of the act prior to the commencement of this lawsuit.”   (Citation omitted.)  Id., 248–49.

In MJM Landscaping v. Lorant, Superior Court, judicial district of Stamford–Norwalk at Norwalk, Docket No. CV 99 0174738 (January 8, 2001, Hickey, J.), the plaintiff submitted evidence that “the defendant expressed his satisfaction with the plaintiff's work while construction was in progress and after its completion ․ the defendant failed to visit the construction site to inspect the plaintiff's work and repeatedly made assurances that all of the bills would be paid ․” In contrast to Wadia Enterprises, the MJM Landscaping court denied the defendant's motion for summary judgment based on the plaintiff's failure to comply with § 20–429 because “[t]he evidence submitted to the court [wa]s at least sufficient to show a design to mislead or deceive the plaintiff by inducing the plaintiff to continue performing additional work with assurances of payment and representations of satisfaction with the plaintiff's performance.”  (Internal quotation marks omitted.)  Id.

In the present case, the plaintiff invokes the claim of bad faith, alleging that he did previous work for Mathew Sivilla at Mathew Sivilla's home and businesses.   The plaintiff claims that he told the defendants the job required custom-made materials and specialized skill, he could not predict the time of completion or exact cost, he would have to work on a cost-plus basis and he would diligently work on the project to complete it as quickly as possible given the “exacting workmanship” required.   The plaintiff alleges that the defendants agreed to these terms.   The plaintiff further alleges in the fact section of his memorandum in opposition that the defendants at no point objected to the cost of materials, time of delivery or pace or quality of the work, but instead were pleased with the work's progression and final product.   In his affidavit attached to his objection to the motion for summary judgment, the plaintiff further avers that he worked on a handshake basis for an earlier job for the defendants, the defendants liked his work and believed he charged a fair price.   The plaintiff further states that the defendants were agreeable to not having an exact start or completion date or exact price quote, which the plaintiff explained he could not provide given the specialized nature of the job, because “they said they had confidence in my workmanship.”   The plaintiff avers that he was in constant contact with the defendants about the job's status, costs and completion schedule and that the defendant's never objected to the time of performance, costs of materials or quality of the work and were satisfied with the end product.

The plaintiff has submitted evidence that he informed the defendants before beginning the job that, given the nature of the job, he was unable to provide them with the start and completion date.   Construing such evidence in favor of the nonmovant plaintiff, it gives rise to a question of fact concerning whether the defendants were informed and knew that the contract did not comply with § 20–429(a) and nonetheless agreed to have the plaintiff do the work, which gives rise to a genuine issue of material fact as to whether their subsequent invocation of § 20–429 was prompted by an honest mistake about their rights or an issue of bad faith.

The plaintiff's additional evidence, in the form of an affidavit stating that the defendants were satisfied with the pace and results of his work further establishes that there is a genuine issue of fact as to whether the defendants have invoked the Home Improvement Act in bad faith.   Here, as in MJM Landscaping v. Lorant, supra, “[t]he evidence submitted to the court is at least sufficient to show a design to mislead or deceive the plaintiff by inducing the plaintiff to continue performing additional work with assurances of payment and representations of satisfaction with the plaintiff's performance.”   Thus, because a genuine issue of fact exists as to whether the defendants acted in bad faith, they are not entitled to summary judgment on the ground that the home improvement contract does not comply with § 20–429(a).

B

Eleanor Sivilla not a Party to the Contracts

Eleanor Sivilla has moved for summary judgment on the ground that there is no genuine issue of material fact that she is not a party to any contract with the plaintiff and is therefore entitled to judgment as a matter of law as to the cause of action against her.   She has attached to the motion two contracts dated September 21, 2011 and December 22, 2011.   Both contracts bear the signatures of Mathew Sivilla and the plaintiff, but not her signature.   Attached is also the affidavit of Mathew Sivilla stating that the September contract was the prime contract, that the December contract was for additional work and that Eleanor Sivilla neither signed nor was a party to either contract.   In his memorandum in opposition, the plaintiff did not object to Eleanor Sivilla's motion on the ground that she was not a party to any contract with the defendant.   At oral argument, however, although the plaintiff did not contest that Eleanor Sivilla did not sign a contract, he did assert that she did watch and inspect his work.

“[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 ․ In other words, [a] person who is not a party to a contract (i.e., is not named in the contract and has not executed it) is not bound by its terms.”  (Citation omitted;  internal quotation marks omitted.)  FCM Group, Inc. v. Miller, 300 Conn. 774, 797, 17 A.3d 40 (2011).  “The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.”  (Internal quotation marks omitted.)  American Express Centurion Bank v. Head, 115 Conn.App. 10, 15–16, 971 A.2d 90 (2009).

In the present case, the evidence submitted shows that Eleanor Sivilla has neither signed a contract with the plaintiff nor expressed assent to be bound by any agreement with the defendant.   The fact that she watched and inspected the plaintiff's work done under contract for Mathew Sivilla does not imply that she assented to being bound by any agreement to pay the plaintiff for that work.   Even if the plaintiff is pursuing liability under a theory of bad faith, the defendant must be a party to a contract with the defendant or owe the defendant some other duty.   See Wadia Enterprises, Inc. v. Hirschfeld, supra, 224 Conn. 248 (“bad faith ․ involv[es] 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” [emphasis added;  internal quotation marks omitted] ).   Eleanor Sivilla has met her burden of showing that there is no genuine issue of material fact that she was not a party to the contract and that she is entitled to summary judgment as a matter of law.   The plaintiff has not offered evidence that Eleanor Sivilla was a party to a contract with him or owed him some other duty giving rise to the possibility of bad faith on her part as would be required to rebut her showing that she is entitled to summary judgment.

IV

CONCLUSION

For the foregoing reasons, the motion for summary judgment is denied as to Mathew Sivilla and granted as to Eleanor Sivilla.

BY THE COURT

V. ROCHE, J.

Roche, Vincent E., J.