490 WEST JACKSON, LLC v. PETER LEWIS ET AL.

2009 Ct. Sup. 18830
No. CV07 5011631Connecticut Superior Court Judicial District of Fairfield at Bridgeport
November 17, 2009

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

MEMORANDUM OF DECISION
RICHARD E. ARNOLD, Judge.

The plaintiff has brought this action by way of a writ, summons and complaint dated October 9, 2007, bearing a return date of November 13, 2007. On September 3, 2008, the plaintiff filed an Amended Complaint dated, August 26, 2008.[1] The Amended Complaint contains five counts.[2] The first three counts allege damages for various breaches of a contract. The Fourth Count seeks to recover use and occupancy payments provided for in said contract. The Fifth Count alleges unjust enrichment. The contract referred to in the allegations is a written Bond for Deed (“Agreement”) signed by the parties on November 14, 2006.

The defendants filed their Answer and Special Defenses to the original complaint on December 3, 2007, denying the allegations and leaving the plaintiff to its proof. The First Special Defense claims the defendants made partial payments under the “Agreement” and otherwise paid by virtue of the buyers’ purchase credit of 4% of the purchase price as provided in the original `Agreement.'” The Second Special Defense claims waiver by the plaintiff. The defendants never filed a written Amended Answer and Special Defenses in response to the plaintiff’s Amended Complaint. Pursuant to Practice Book § 10-61, the court applies the original Answer and Special Defenses to the Amended Complaint so far as possible.[3] At trial, the testimony of the defendant Peter Lewis reveals that both defendants deny the allegations of the plaintiff’s Amended Complaint and they continue to assert their special defenses.

A court trial was held on April 29, 2009. The court heard testimony from Deidre Virvo, a member of 430 West Jackson, LLC, and the defendant, Peter Lewis. The court gave each party an opportunity to file post-trial memorandum of law. The plaintiff submitted its post-trial brief on June 16, 2009. The defendant has not submitted any post-trial brief.[4]

CT Page 18831

I Facts
The defendants were the owners of 430 West Jackson Ave., Bridgeport, Connecticut, prior to May 12, 2006. On May 12, 2006, title to this property vested in Pledged Property II, LLC, by virtue of a Certificate of Foreclosure dated June 5, 2006, and recorded on the Bridgeport Land Records. The plaintiff, thereafter, purchased said real property from Pledged Property II, LLC, on October 30, 2006, for the sum of $265,000. The defendants at all times remained in physical possession of their foreclosed property and continued to reside there throughout their dealings with the plaintiff.

On November 14, 2006, the plaintiff and the defendants signed a written agreement titled “Bond for Deed,” as the defendants wanted to remain in the house, but could not afford to purchase the property from the plaintiff.[5] Under the terms of the Bond for Deed the purchase price for the property would be $330,000.00. The parties further agreed that the defendants would pay the plaintiff monthly payments of principal and interest in the amount of $2,339.00; real estate taxes in the amount of $494.00; and property insurance in the amount of $155.00. The total of each monthly payment due the plaintiff from the defendants, therefore, was $3,048.00. Payments were to be made on the first day on each month commencing December 1, 2006, and ending November 1, 2011, at which time the remaining principal and interest would become due and payable. Upon payment of the remaining balance of principal and interest, the plaintiff would transfer title to the defendants by way of a Warranty Deed.

On December 1, 2006, seventeen days after executing the Bond for Deed, the defendants failed to make the first payment due the defendants. The defendants, thereafter, made a partial payment in January 2007. The defendants did make their February 1, 2007 payment, but failed to make any payment to the plaintiff in March 2007. On March 14, 2007, pursuant to the terms of the Bond for Deed, the plaintiffs mailed to the defendants a “Notice to Cure” letter informing the defendants their failures to make the scheduled payments and the resulting assessment of late charges as provided in the Bond for Deed. The plaintiff demanded payment of $8,101.20 and warned the defendants that failure to cure the default within fourteen days would result in the commencement of proceedings to regain possession of the property. CT Page 18832

By letter dated April 17, 2007, the plaintiff sent the defendants a notice of default. Said notice informed the defendants that because they had not cured the default, the plaintiff would commence summary process proceedings. The plaintiff, thereafter, instituted summary process proceedings against the defendants on or about April 19, 2007. During the course of the summary process proceedings the defendants made several payments, but never became current with their payments.[6]

While the summary process proceedings were pending, the defendants and the plaintiff executed a written Residential Real Estate Contract dated July 16, 2007, for the purchase and sale of the subject real estate. Pursuant to the terms of the written contract, the parties agreed that the defendants were to purchase said property for total purchase price of $307,000.00. The defendants paid the plaintiff a non-refundable deposit in the amount of $5,000.00 at the time the contract was signed. The contract provided for a closing date of no later than July 31, 2007. Section 27 of the contract captioned “Eviction” states:

The parties acknowledge that a summary process action . . . has been commenced against the Buyers [defendants] to recover possession of the premises. The parties hereby agree that the execution of this Contract and any and all actions undertaken by the Seller [plaintiff] and/or Buyer [defendants] shall be considered Settlement Activities and cannot be used to hinder, delay or otherwise defeat the afore-noted Summary Process action . . .

Paragraph 30 of the Contract states:

Buyer agrees to pay $1,500.00 to Seller in addition to the purchase price as partial payment for their use of the premises. If Buyer fails to close by July 31, 2007, Buyer agrees to pay $3,048.00 (pro rata) in addition to the purchase price and the $1,500.00 set forth above.

While the Residential Real Estate Contract references the existence of the pending summary process action in paragraph 27, the contract is silent as to the Bond for Deed and any claims for monetary damages by the plaintiff, flowing therefrom, as a result of CT Page 18833 the defendants’ default under the Bond for Deed. The plaintiff testified she instructed her attorney to omit references in the real estate contract to any claims for use and occupancy, real estate taxes and insurance payment arrearages owed by the defendants per the Bond for Deed because she intended to sue the defendants for these amounts after the closing of title to the subject property had occurred. The plaintiff claimed that to preserve its rights under the Bond for Deed, a separate and distinct “Contract for Sale” was executed. However, there is no evidence that the defendants were aware or agreed that the Bond for Deed and any obligations thereunder, were to survive the closing of title. The defendants were aware that the summary process action would proceed until the closing of title or thereafter, if no closing occurred.

The summary process action continued subsequent to the execution of the contract for the purchase and sale of the subject real estate. As a result of the summary process proceedings, the parties entered into a stipulated judgment for possession of the premises for the plaintiff with a final stay of execution through October 31, 2007. In accordance with the stipulation of the parties, the court (Cocco, J.), ordered the defendants to pay reasonable monthly use and occupancy payments in the amount $3,048.00 commencing September 10, 2007. The defendants were also ordered to pay use and occupancy for August 2007, in an amount of $3,048.00. The defendants waived all rights to a further stay of execution, as well as the right to appeal or to re-open the judgment. The stipulated judgment made no mention of any finding of an arrearage; nor did the defendants acknowledge an arrearage resulting from their tenancy or the Bond for Deed. The defendants did not purchase the subject real estate by July 31, 2007, as provided in the contract. The defendants did pay the use and occupancy payments called for in the stipulated judgment for the summary process action.[7]

Despite the fact that the closing of title was delayed past the contract date of July 31, 2007, the parties did proceed to a closing of title on September 17, 2007 in accordance with the other terms of the contract. The defendants were represented at the closing by legal counsel, as was the plaintiff. The Department of Housing and Urban Development Settlement Statement prepared for the closing reveals that there were no adjustments by the parties at the closing for payments by the defendants to the plaintiff for any arrearages claimed by the plaintiff for use and occupancy payments, real estate tax payments, insurance payments pursuant to the Bond for Deed or the summary process stipulated judgment.[8] CT Page 18834

II Discussion
The claimed balance due requested by the plaintiff is $18,386.89, which includes the unpaid balance of principal and interest, pursuant to the terms of the Bond for Deed, in the amount of $17,015.19, plus late charges in the amount of $1,371.60.[9] The plaintiff has also submitted a claim for an attorneys fee.[10]

The plaintiff claims that the intent of the parties must be considered in construing the contract and the testimony of the parties regarding the Bond for Deed is uncontroverted. The purpose of the Bond for deed was to allow the defendants to remain in the residence until they could eventually re-purchase their home. Immediately after the Bond for deed was executed, the defendants became in default of their obligations under the Bond for Deed. The plaintiff was forced to maintain the property out of its own financial resources until the defendants eventually purchased the property on September 17, 2007. The plaintiff eventually had to institute summary process proceedings against the defendants on or about April 19, 2007.

There is no question that the defendants recognized their financial obligations to the plaintiff under the terms of the Bond for Deed. They continually promised to pay the balances that were due. However, the defendant Peter Lewis testified that he believed that the signing of the Residential Real Estate and the entering into a stipulated judgment at the summary process proceedings ended the parties’ respective obligations under the Bond for Deed. The plaintiff admits that she did not evict the defendants after they defaulted on the terms of the stipulated judgment because she wanted them to buy the property. The plaintiff also testified that she did not want to reference the Bond for deed in the real estate contract and did not pursue the collection of any arrearages at the closing because he intended to pursue this separate action after the successful closing of title. Thus, the real estate contract is silent regarding the Bond for Deed and as to any continuing obligations by the defendants or any waiver of rights by the plaintiff. Additionally the HUD 1 Settlement Statement shows no seller credit or adjustment for any arrearages due under the Bond for Deed or the stipulated summary process judgment.[11]

Paragraph 13 of the Residential Real Estate Contract CT Page 18835 dated July 16, 2007, states “this contract, its attachments and exhibits, if any, referred to in the body of this Contract, constitute the entire agreement of the parties and no oral statements or understandings or modifications hereof not reduced to writing shall be binding upon the Parties.” The court has already noted that the stipulated judgment in the summary process action dated August 8, 2007 required the defendants to pay the sum of $3,048.00 in August 2007 and the defendants did pay the use and occupancy payments in the amount of $3,048.00 for August 2007 and September 10, 2007, as provided in the stipulated judgment. This stipulated judgment occurred twenty-three days subsequent to the signing of the Residential Real Estate Contract, which was dated July 16, 2007. However, paragraph 30 of the contract reveals that the defendants agreed to pay $1,500.00 to the plaintiff as partial payment for their use of the premises from July 16, 2007 to the scheduled closing date of July 31, 2007 and an additional pro rata $3,048.00 per month if the defendants failed to close by July 31, 2007. Accordingly, the contract entitled the plaintiff to a closing adjustment in its favor of $1,500.00 to July 31, 2007, $3,048.00 for August 2007 and $1,727.20 from September 1, 2007, through September 17, 2007.[12] The plaintiff by the testimony of Vivro, its member, affirmed that the plaintiff did not seek this adjustment in its favor at the closing of title, as the plaintiffs made payments of $1,500.00 in July 2007; $3,048.00 in August 2007; and $3,048.00 on September 14, 2007.

The standard for the court’s interpretation of the Bond for Deed and the Residential Real Estate Contract between the parties is well established. “A contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction . . . [T]he intent of the parties 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 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 . . .” (Citations omitted, internal quotation marks omitted.) Allstate Life Insurance v. BFA Limited Partnership, 287 Conn. 307, 313, 948 A.2d 318 (2008).

CT Page 18836

“When there are multiple writings regarding the same transaction, the writings should be considered together to determine the intent of the parties.” (Internal quotation marks omitted.) 669 Atlantic Street Associates v. Atlantic-Rockland Stamford Associates, 43 Conn.App. 113, 123, 682 A.2d 572, cert. denied, 239 Conn. 949, 950, 686 A.2d 126
(1996). “Where . . . the signatories execute a contract which refers to another instrument in such a manner as to establish that they intended to make the terms and conditions of that other instrument a part of their understanding, the two may be interpreted together as the agreement of the parties.” (Internal quotation marks omitted.) E F Construction Co. v. Rissil Construction Associates, Inc., 181 Conn. 317, 319, 435 A.2d 343 (1980). When parties execute a contract that clearly refers to another document, there is an intent to make the terms and conditions of the other document a part of their agreement, so long as both parties are aware of the terms and conditions of that other document. (Citations omitted) Allstate Life Insurance v. BFA Limited Partnership, 287 Conn. 307, 315, 948 A.2d 318 (2008). In this matter, the Residential Real Estate contract makes no reference to or mention of the Bond for Deed, as the plaintiff ordered her attorney to omit any such reference.

The court has reviewed the testimony and the evidence in this matter. It is obvious that the defendants were financially stressed as evidenced by the fact that the defendants’ residence had been foreclosed upon previously. It is also evidenced by the fact that they were in default of the terms of he Bond for Deed. It is also evident that the plaintiff eventually recognized the defendants’ inability or unwillingness to abide by the terms of the Bond for Deed because the plaintiff instituted summary process proceedings in April 2007. Given the plaintiff’s experience with the defendants, it is not certain to the court as to why the plaintiff would then enter into a Residential Real Estate Contract with the defendants with terms that called for a price that was $23,000.00 less than the sales price noted in the Bond for Deed. It is further evidenced by the fact that the plaintiff sought no closing adjustments in its favor for any arrearages or claimed balances owed by the defendants per the Bond for Deed. The plaintiff knowingly avoided pursuing any such claims in the Residential Real Estate Contract, so as to not doom the potential sale to the defendants to failure. The only reasonable explanation is that the plaintiff was increasingly desperate to sell the property and reduce its financial losses. This inference becomes more reasonable in light of the fact that the plaintiff extended the CT Page 18837 contract closing date from July 31, 2007 to September 17, 2007 when the closing of title occurred. It is obvious that the plaintiff wants to sell the property, rather than incur further costs. The plaintiff was aware that if it continued to pursue any claims for balances due on the Bond for Deed by way of referencing such claims in the Residential Real Estate Contract or by way of a seller’s credit for losing adjustments, the sale to the defendants would not occur.

In light of this evidence the defendants’ testimony becomes credible that they believed that the closing of title on September 17, 2007, would end any and all financial obligations that they owed to the plaintiff. It is not reasonable for this court to believe that the defendants would purchase the property from the plaintiff for a price of $307,000.00, utilizing proceed from a first and second mortgages, knowing they would immediately be facing a claim from the plaintiff for damages in the amount of $18,386.79 per the Bond for Deed and a sum exceeding $12,000.00 for the plaintiff’s attorneys fees. The plaintiff realized this fact, and thus, elected to remain silent as to its intentions until such time as the closing had occurred.[13]

The defendants claim the plaintiff waived its rights under the Bond for Deed and are estopped from asserting any rights which the plaintiff may have had under the terms of the Bond for Deed. The court agrees.

The issues of waiver and estoppel are subsidiary questions of fact, dependent on all of the surrounding circumstances and the testimony of the parties. Frantz v. Romaine, 93 Conn.App. 385, 396-97, 889 A.2d 865
(2006) “Waiver is the intentional relinquishment or abandomnent of a known right or privilege . . . Waiver is based upon a species of the principle of estoppel and where applicable it will be enforced as the estoppel would be enforced . . . Estoppel has its roots in equity and stems from the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed . . . 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 . . .” MBNA America Bank, N.A. v. Bailey, 104 Conn.App. 457, 466, 934 A.2d 316 (2007). “Whether conduct constitutes a waiver is a question of fact.” (Internal quotation marks omitted.) Cassella v. Kleffke, CT Page 18838 38 Conn.App. 340, 347, 660 A.2d 378, cert. denied, 235 Conn. 905, 665 A.2d 899 (1995); see Prantz v. Romaine, 93 Conn.App. 385, 396-97, 889 A.2d 865, cert. denied, 277 Conn. 932, 896 A.2d 100 (2006) (The issue of waiver is a question of fact, dependent on all of the surrounding circumstances and the testimony of the parties.)

III Conclusion and Orders
Having considered the evidence and the testimony of the parties the court finds that plaintiff waived any rights that may have arisen from prior defaults in payments by the defendants under the terms of the Bond for Deed. The payment by the defendants of their financial obligations pursuant to the stipulated judgment in the summary process action and their obligations under the Residential Real Estate Contract extinguished or voided the Bond for Deed. See Frantz v. Romaine, supra, 93 Conn.App. 385. Accordingly, judgment shall enter for the defendants.

[1] The plaintiff filed a Request For Leave To File Amended Complaint and the plaintiff did not object. See Practice Book § 10-60(a)(3).
[2] The original Complaint consisted of one count containing twenty-one paragraphs.
[3] Practice Book § 10-61, Pleading after Amendment, reads as follows:

When any pleading is amended the adverse party may plead thereto within the time provided by Section 10-8
or, if the adverse party has already pleaded, alter the pleading, if desired, within ten days after such amendment or such other time as the rules of practice, or the judicial authority, may prescribe, and thereafter pleadings shall advance in the time provided by that section. If the adverse party fails to plead further, pleadings already filed by the adverse party shall be regarded as applicable so far as possible to the amended pleading.

[4] The defendant was represented at trial by legal counsel, Atty. CT Page 18839 Stuart Sheiman. The court checked the Clerk’s Office and the Judicial Website as recently as October 5, 2009, and has determined that no post-trial brief has been filed in the defendant’s behalf.
[5] The Bond for Deed is Exhibit 1.
[6] The defendants made the following payments pursuant to the Bond for Deed: $1,500.00 (January 2007); $3,048.00 (February 2007); $1,500.00 (July 2007); $3,048.00 (August 2007); $3,048.00 (September 2007).
[7] An accounting submitted by the plaintiff’s (exhibit 7) indicates the defendants made a $1,500 payment in July 2007; a $3,048.00 payment on or about August 20, 2007 and $3,048.00 on or about September 14, 2007.
[8] There was the normal closing adjustment for real estate taxes resulting in a seller’s [plaintiff’s] credit for the period from September 17, 2007 to December 31, 2007 as the plaintiff had prepaid the real estate taxes through December 31, 2007.
[9] The Bond for Deed provides in Section 15, that if the “Purchaser shall fail to pay, within five (5) days after the date, any installment due hereunder, Purchaser shall be required to pay an additional charge of five (5%) percent of the late installment . . .”
[10] Paragraph 14 of the Bond for Deed states: “In the event of default, Purchaser [defendants] shall pay to Seller [plaintiff], Seller’s reasonable and actual attorneys fees and expenses incurred by Seller in enforcement of any rights of Seller. All attorney fees shall be payable prior to Purchaser’s being deemed to have corrected any such default.”
[11] Paragraph 4 of the contract calls for adjustments of rents, common charges, fuel oil, rental and utility deposits, utility and water charges, municipal assessments and municipal taxes. The HUD form from the closing of title reveals that an adjustment in the plaintiff’s favor was made for municipal property taxes.
[12] The per diem rate for $3,048.00 divided by 30 days is $101.60.
[13] The court has no knowledge or evidence as to whether the CT Page 18840 mortgage lenders were aware of the plaintiff’s claims at the time they extended the mortgage loans to the defendants or if it would have impacted their decisions to extend the mortgage loan proceeds to the defendants.

CT Page 18841