2005 Ct. Sup. 2139
No. CV 02 0188872Connecticut Superior Court, Judicial District of Stamford-Norwalk at Stamford
February 14, 2005
MEMORANDUM OF DECISION
This case, which was tried by an attorney trial referee, involves a dispute about construction work performed by the plaintiff, A.P. Savino, LLC, a construction manager and building contractor, on a residential dwelling belonging to the defendants, Mark Cone and Catherine Cone, and located at 21 Indian Head Road, in the Riverside section of Greenwich.
The plaintiff’s amended complaint contains three counts. In the first count, the plaintiff seeks to foreclose a mechanic’s lien filed in the Greenwich Land Records in March 2002 for approximately $135,000. The second count is for unjust enrichment in which the plaintiff alleged that in late 2000, it provided labor and material for an addition and renovations at the defendants’ home, the reasonable value of which was $472,118, of which a balance of $136,280 remained unpaid. In the third count, the plaintiff alleges that the parties entered into a written contract on December 19, 2000, for renovations and improvements at the defendants’ home, that labor and material were supplied to the defendants for that purpose and that $136,280 remains due and unpaid “in accordance with the contract.” The plaintiff also seeks interest and attorneys fees as provided in said contract.
The defendants denied the material allegations in the complaint and filed two special defenses alleging first, that the plaintiff failed to complete its obligations under the contract, and second, that the plaintiff’s claim of unjust enrichment was barred by the doctrine of “unclean hands.” The defendants also filed a counterclaim containing five counts, breach of contract, negligence, negligent misrepresentation, breach of fiduciary duty, and a violation of General Statutes § 42a-110 et seq., the Connecticut Unfair Trade Practices Act (CUTPA).
The case was referred to Attorney Kenneth B. Povodator, an CT Page 2140 attorney trial referee, pursuant to General Statutes §52-434(a)(4) and Practice Book § 19-2A. The referee conducted a three-day trial and submitted a report, as required by Practice Book § 19-8, containing 62 separate findings of fact.
The attorney trial referee’s findings of fact may be summarized as follows: (1) the contract signed by the parties on December 19, 2000, was a “construction management contract” which provided for a construction management fee for the plaintiff of $30,000 in addition to the actual cost of the construction work itself; (2) based on plans drawn by the defendants’ architect, the plaintiff provided a preliminary budget estimating the cost of construction at $269,000; (3) the contract provided that except for the management fee, the amounts payable by the defendants would be based on the actual cost of the project, and the defendants understood that the budgets submitted by the plaintiff were estimates and would need to be revised in accordance with various changes that they requested; (4) the defendants requested a number of changes in the original plans and the plaintiff submitted several revised budgets including a final estimated cost of $355,200, an amount which the defendants agreed to pay; (5) the defendants paid the plaintiff approximately $330,000 during the course of construction; (6) the plaintiff performed “most” of the work necessary to complete the project, but any unperformed work was irrelevant to this action as the defendants were only billed for the cost of the work actually done; (7) the work performed by the plaintiff on the defendants’ home was done in a workmanlike manner; (8) the contract provided that a bank account would be established to be funded by the defendants and the plaintiff could draw money from this account as bills for construction were submitted; (9) this account was set up and used in a proper fashion, contrary to the defendants’ assertion of “unclean hands;” (10) in November 2001, the defendants stopped funding the account because they claimed the project was behind schedule and was costing more than anticipated; (11) there was no fiduciary relationship between the construction manager/builder and the defendant home owners; (12) in January 2002, when the plaintiff advised the defendants that the project would cost approximately $100,000 more than indicated on the last budget estimate, the defendants refused to pay any more money and the plaintiff did not return to the project after the Christmas holiday season when it had stopped work; (13) the plaintiff breached the contract “at least technically” by not keeping the defendants informed adequately or in a timely fashion of estimated costs as the project advanced, but that any such CT Page 2141 breach was not “material” and did not cause any damages to the defendants, except for $1 nominal damages; (14) the plaintiff proved that it was entitled to $125,585 based on the actual costs associated with the project; (15) the contract between the parties provided for interest in the amount of 18% per year on unpaid amounts and for costs of collection, including “reasonable” attorneys fees in the event of a suit to collect any unpaid balance; and (16) the defendants failed to prove that the plaintiff violated CUTPA, any alleged fiduciary duty or that they were entitled to any damages from the plaintiff based on their counterclaim.
Based on these findings of fact, the attorney trial referee concluded that: (1) the defendants breached the contract by failing to pay the full amount of the actual cost of the project; (2) the plaintiff is entitled to foreclose its mechanic’s lien; and (3) the defendants owe the plaintiff $125,585, plus interest and attorneys fees.
The attorney trial referee in this case filed recommendations for judgment for the plaintiff under “alternative” theories, although Practice Book § 19-8 does not specifically mention this mode of report. The first alternative was based on a foreclosure of the mechanic’s lien, plus an amount due under the contract and also a recovery under unjust enrichment. The second theory involves solely the foreclosure of the mechanic’s lien in the amount of $128,585 based on a breach of the written contract between the parties.
Thereafter, as authorized by Practice Book § 19-14,
both the plaintiff and the defendants filed objections to the referee’s report and recommendations. The plaintiff objected on the basis that the attorney trial referee had arbitrarily and without justification reduced his recommended award for unjust enrichment by 15%.
The defendants’ objections to the report were: (1) no recovery may be based on breach of contract because the plaintiff never claimed in its complaint that there had been such a breach; (2) the defendants agreed to pay a maximum of $355,000 to the plaintiff for the cost of construction and did pay $330,000 and therefore the plaintiff would be entitled to a maximum recovery of $25,000 under any circumstances; (3) the plaintiff breached the contract by exceeding the agreed-to budget and by not keeping the defendants informed about the eventual cost of the project, CT Page 2142 and, contrary to the referee’s report, the defendants did suffer monetary damages as a result; (4) since the plaintiff breached the contract, it was not entitled to any recovery, including interest or attorneys fees; (5) the plaintiff failed to establish a separate escrow account without commingling of funds from other jobs and to pay invoices therefrom in a proper manner; (6) the plaintiff had a fiduciary duty to the defendants which it breached; (7) the defendants did not request changes to the scope of the work justifying the claimed increase in price over the budget; and (8) the work performed by the plaintiff was negligent in some respects and was not entirely acceptable to the defendants.
Practice Book § 19-17(a) involves the function of this court in reviewing reports of attorney trial referees and provides: “The court shall render such judgment as the law requires upon the facts in the report. If the court finds that the . . . attorney trial referee has materially erred in its rulings or that there are other sufficient reasons why the report should not be accepted, the court shall reject the report and refer the matter to the same or another . . . attorney trial referee . . . for a new trial or revoke the reference and leave the case to be disposed of in court.”
“[T]he trial court must review the referee’s entire report to determine whether the recommendations contained in it are supported by findings of fact in the report.” (Internal quotation marks omitted.) Killion v. Davis, 257 Conn. 98, 102, 776 A.2d 456 (2001). Second, the court must insure that the report does not contain “legal conclusions for which there are no subordinate facts.” (Internal quotation marks omitted.) Id. Third, the report must be reviewed to determine if it is “legally and logically correct . . .” (Internal quotation marks omitted.)Id., 103.
Other principles governing attorney trial referee reports provide: “It is axiomatic that [a] reviewing authority may not substitute its findings for those of the trier of the facts. This principle applies no matter whether the reviewing authority is the Supreme Court . . . the Appellate Court . . . or the Superior Court reviewing the findings of . . . attorney trial referees. See Practice Book § [19-17] . . . [Our Supreme Court] has articulated that attorney trial referees and factfinders share the same function . . . whose determination of the facts is reviewable in accordance with well established procedures prior CT Page 2143 to the rendition of judgment by the court . . . The factual findings of a [referee] on any issue are reversible only if they are clearly erroneous . . . [A reviewing court] cannot retry the facts or pass upon the credibility of the witnesses . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” (Citation omitted; internal quotation marks omitted.)Meadows v. Higgins, 249 Conn. 155, 162, 733 A.2d 172 (1999).
The essence of the attorney trial referee’s report is that the written contract between the parties was not based on a fixed price, that the plaintiff performed its work on the defendants’ home in a workmanlike manner and in accordance with the contract, and that the defendants owe the plaintiff $128,585.
As to the defendants’ objections to the report claiming that the construction work by the plaintiff was unworkmanlike, negligent and deficient in some respects and that the plaintiff therefore breached the contract, this is a clear attempt to substitute their version of the facts for that of the referee. If the defendants’ objections to the report were sustained in this regard, the court in effect would be retrying the case and reexamining the credibility of the witnesses, which is not permitted. Argentis v. Gould, 23 Conn.App. 9, 19, 579 A.2d 1078, rev’d on other grounds, 219 Conn. 151, 592 A.2d 375 (1991).
It is obvious in this case that the referee chose to believe testimony presented by the plaintiff regarding the actual costs associated with this project and the fact that these costs exceeded the last budget due to changes requested by the defendants. “In making this explicit factual determination, the attorney trial referee implicitly found certain witnesses to be credible and believable in their testimony. This was precisely his function as a fact finder. The resolution of conflicting factual claims falls within the province of the trial court.”Nor’easter Group, Inc. v. Colossale Concrete, Inc., 207 Conn. 468, 473, 542 A.2d 692 (1988).
Additionally, “[g]reat deference is given to the trial court’s findings because the trial court is responsible for weighing the evidence and determining the credibility of witnesses.” Beizer v. Goepfert, 28 Conn.App. 693, 704-05, 613 A.2d 1336, cert. denied, 224 Conn. 901, 615 A.2d 1049 (1992), cert. denied, CT Page 2144 507 U.S. 973, 113 S.Ct. 1416, 122 L.Ed.2d 786 (1993). A reviewing court should not retry the facts or assess the credibility of the witnesses. The “finder of fact is in a better position to determine the credibility of the witnesses and the weight to be accorded their testimony.” Id., 706.
In addition, “findings of fact in a contract action should be overturned only when they are clearly erroneous.” Wilcox Trucking, Inc. v. Mansour Builders, Inc., 20 Conn.App. 420, 425, 567 A.2d 1250, cert. denied, 214 Conn. 804, 573 A.2d 318 (1990). The recommendations of the attorney trial referee should be accepted when “there is nothing that is unreasonable, illogical or clearly erroneous in the findings of the fact finder and the reasonable inferences that may be drawn therefrom.” Id.
The defendants’ other objections to the report are not persuasive either. The defendants contend that the third count does not allege a breach of contract on their part and therefore there can be no recovery under contract, including either interest nor attorneys fees. The third count alleges there was a written contract which was attached to the complaint. Although not using the word “breach” as such, this count alleges that the plaintiff supplied the labor and material due under the contract and a balance remains due and unpaid. The interpretation of pleadings is always a question of law for the court. Cahill v. Board of Education, 198 Conn. 229, 236, 502 A.2d 410 (1985) Drummond v. Hussy, 24 Conn.App. 247, 248, 588 A.2d 223 (1991). In addition, “[t]he allegations of the complaint must be given such reasonable construction as will give effect to [it] in conformity with the general theory which it was intended to follow, and do substantial justice between the parties.” Burns v. Keller, 11 Conn.App. 375, 382, 527 A.2d 1210 (1987).
The attorney trial referee found that the bank account created to pay for the renovations and construction was properly set up and administered, despite the defendants’ claim that their money was commingled with that of other jobs. The referee found that there was no requirement in the contract for a separate escrow account for the defendants’ money, and that it would have been impractical to do so in any event.
The defendants’ claim that they were owed a fiduciary duty because the plaintiff was an experienced builder and they were neophytes in construction is rejected. “A fiduciary or confidential relationship is characterized by a unique degree of CT Page 2145 trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other . . . The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him.” Albuquerque v. Albuquerque, 42 Conn.App. 284, 287, 679 A.2d 962 (1996). “Whether such a confidential relationship exists is a factual question for the trial court.” Id. Furthermore, “equity has carefully refrained from defining a fiduciary relationship in precise detail and in such a manner as to exclude new situations.” Konover Development Corp. v. ZelIer 228 Conn. 206, 222, 636 A.2d 798 (1994). The attorney trial referee made a factual finding that there was no fiduciary relationship between this plaintiff and the defendant homeowners, and that finding is not subject to challenge, based on the above-cited authority. Moreover, the defendants did not cite any relevant authority that the relationship between a building contractor and/or construction manager and a homeowner gives rise to a fiduciary relationship.
Based on the applicable standard of review outlined above, the attorney trial referee’s report and recommendations are accepted. No material error in the referee’s report has been found, and there is no other sufficient reason for rendering the report unacceptable. Practice Book § 19-17(a). Judgment hereby enters in favor of the plaintiff that its mechanic’s lien be foreclosed. The debt is found to be $128,585 as of the date of this decision, plus interest at 18% per year commencing March 7, 2002 to the date of final judgment. The matter is remanded to the attorney trial referee for the sole purpose of recommending an amount for attorneys fees for the plaintiff as provided in the contract. This hearing should be scheduled by the referee through the Case Flow Office. The report should be confined to a recommendation of a specific attorneys fee and precisely how this sum was determined.
Judgment is also entered in favor of the plaintiff with respect to the counterclaim filed by the defendants as recommended by the attorney trial referee. As soon as the matter of attorneys fees has been finalized by this court after receiving a supplemental report from the referee, this case should thereafter be claimed by the plaintiff for the foreclosure calendar in order to determine the type and date of foreclosure, value of the premises, the exact amount of the debt and other pertinent details, including the amount of interest due at 18% per year CT Page 2146 from March 7, 2002, as recommended by the attorney trial referee, a rate and starting date accepted by the court, to the date of the final judgment of foreclosure.
Costs are to be taxed in favor of the plaintiff by the clerk of this court in accordance with General Statutes § 52-257 and Practice Book § 18-5.
William B. Lewis, Judge
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