Advanced Financial Services, Inc. v. Associated Appraisal Services, Inc.

79 Conn. App. 22

830 A.2d 240

ADVANCED FINANCIAL SERVICES, INC. v. ASSOCIATED APPRAISAL SERVICES, INC., ET AL.

(AC 22219).

Appellate Court of Connecticut.

Argued April 28, 2003.

Officially released August 26, 2003.

Lavery, C. J., and West and Stoughton, Js. Michael F. Dowley, with whom was Jennifer A. Bernazani, for the appellants-cross-appellees (named defendant et al.).

Thomas P. Wilcutts, with whom were Jeffrey R. Martin and, on the brief, Douglas A. Cho, for the appellee-cross appellant (plaintiff).

Opinion

LAVERY, C. J.

The defendants Associated Appraisal Services, Inc., and Garry R. Brooke¹ appeal and the plaintiff, Advanced Financial Services, Inc., cross appeals from the judgment of the trial court awarding the plaintiff $591,418 plus attorney's fees and costs. On appeal, the defendants claim that the court improperly (1) admitted into evidence an incomplete contract, (2) calculated damages, (3) failed to address their special defense of improper reliance, (4) denied their discovery request for a policy manual, (5) precluded them from conducting voir dire of a plaintiff's witness, (6) precluded them from presenting expert testimony, (7) applied the wrong statute of limitations and (8) denied their motion to disqualify the trial judge. The plaintiff claims in its cross appeal that the court improperly calculated compensatory damages. We affirm the judgment of the trial court.

The following undisputed facts were found by the court. "In early 1995, the plaintiff agreed to make a mortgage loan to Frank S. Sottile, who was purchasing a home then owned by one Kenneth Assad. The home was then under construction in Southington. The loan was to be in the amount of $650,000. The plaintiff contemplated selling the loan to Countrywide Funding Corp. (Countrywide). According to its own practice and as required by Countrywide, the plaintiff, in May, 1995, hired the [defendants] to appraise the property. The appraisal was done by Stephen G. Shore, an independent contractor, who reported the results to [Brooke, the president of the defendant corporation]. An appraisal report was issued by the defendants, purportedly signed by Shore and [Brooke], but in actuality, signed only by Brooke.

"The report assigned a value of $1,100,000 to the property `subject to completion per plan and specifications.' Prior to closing the loan, the plaintiff asked Brooke to reinspect the property because it could not close the loan unless construction was completed. In response to this request, the defendant Brooke again asked Shore to inspect the property. Shore revisited the premises and observed that not only had no further work been done, but also that the property had been damaged by vandalism. He reported his findings to Brooke.

"Notwithstanding this report, Brooke prepared, signed and delivered to the plaintiff a document entitled `Satisfactory Completion Certificate' (completion certificate), which contained the following recital: `I certify that I have reinspected subject property, the requirements or conditions set forth in the appraisal report have been met, and any required repairs or completion items have been done in a workmanlike manner.' The report, purportedly signed also by Shore, was in fact signed only by Brooke who, without authorization, signed Shore's name.

"Relying on the appraisal, [the plaintiff] closed the loan on June 2, 1995, in the amount of $650,000. It thereupon assigned the mortgage to Countrywide. By agreement, [the plaintiff] fully guaranteed the loan to Countrywide. Brooke claimed at trial that [the plaintiff] knew the property was not completed, but told him to send [it] the satisfactory completion certificate notwithstanding. Later in 1995, the Sottile loan went into default. The plaintiff asked Countrywide to handle the foreclosure action, which it did. The judgment obtained found a debt due the plaintiff of $722,646.30 and a fair market value of the property in the amount of $552,000. The plaintiff duly watched over the property and the foreclosure action. Pursuant to its agreement with Countrywide, [the plaintiff] repurchased the loan and paid Countrywide a negotiated sum of $461,499.58, although Countrywide had claimed a loss of $544,091.25." The negotiated sum was the result of an agreement entered into between the plaintiff and Countrywide resolving several outstanding debts the plaintiff owed Countrywide, including the Sottile loan. The court also found that title vested in the plaintiff on May 26, 1996.

The plaintiff brought an amended four count complaint against the defendants, alleging negligence, breach of contract, fraud and recklessness, and, finally, a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. The defendants raised the following five special defenses: (1) statute of limitations, (2) failure to mitigate, (3) contributory negligence, (4) collateral estoppel and (5) improper reliance. The court found in favor of the plaintiff on each count and awarded $591,418 in damages plus attorney's fees and costs. These appeals followed. Additional facts will be set forth as necessary.

I

The defendants' first claim is that the court improperly admitted into evidence as a full contract only a portion of that contract. Specifically, the defendants argue that the court failed to require the production of a manual that was referenced in the contract. We disagree.

The following additional facts are necessary for the resolution of the defendants' claim. The court admitted into evidence a loan purchase agreement (agreement) between Countrywide and the plaintiff dated January 16, 1990, which outlined the parties' respective rights and obligations to each other when purchasing and selling loans. That agreement makes reference to Countrywide's correspondent lending division loan purchase program seller's manual (manual) that sets forth additional terms, conditions and procedures. On April 6, 2001, four days before trial began, the defendants asked the court to order the plaintiff to produce the manual. The plaintiff informed the court that neither it nor Countrywide had the manual as it existed in 1995, but that there was a 2001 version on Countrywide's Internet web site. The court ordered the plaintiff to access the 2001 manual and to provide the defendants with any material concerning the completion certificate. On April 17, 2001, the plaintiff informed the court that it had provided the defendants with those portions of the manual before trial began. The defendants did not dispute that assertion.

The defendants, at trial, objected to the agreement's being admitted into evidence because it was incomplete due to the absence of the manual. The plaintiff argued that the agreement had been authenticated and identified by Dennis F. Hardiman, the chief executive officer of the plaintiff corporation, and that questions pertaining to the manual were a proper subject for cross-examination, but did not concern the agreement's admissibility. The court informed the defendants that the agreement might become worthless after cross-examination concerning the absence of the manual, but that its absence alone did not make the agreement inadmissible. The court then overruled the defendants' objection.

The defendants argue that the court admitted the agreement as a full contract without requiring the plaintiff to introduce the manual. According to the defendants, the agreement was incomplete without the manual. The defendants contend that they were harmed by the court's ruling because the plaintiff was allowed to bring an action on an incomplete agreement, their ability to challenge the plaintiff's claim of damages was impaired and they were prohibited from effectively raising their special defense of contributory negligence.

We first set forth our standard of review. "We have generally held that [t]he trial court has broad discretion in ruling on the admissibility [and relevancy] of evidence.... The trial court's ruling on evidentiary matters will be overturned only upon a showing of a clear abuse of the court's discretion. . . . Additionally, before a party is entitled to a new trial because of an erroneous evidentiary ruling, [it] has the burden of demonstrating that the error was harmful. . . . The harmless error standard in a civil case is whether the improper ruling would likely affect the result." (Citation omitted; internal quotation marks omitted.) Urich v. Fish, 261 Conn. 575, 580-81, 804 A.2d 795 (2002).

The defendants cite § 1-5 (a) of the Connecticut Code of Evidence in support of their claim. That section provides that "[w]hen a statement is introduced by a party, the court may, and upon request shall, require the proponent at that time to introduce any other part of the statement, whether or not otherwise admissible, that the court determines, considering the context of the first part of the statement, ought in fairness to be considered contemporaneously with it." Even if we assume, without deciding, that this evidentiary section applies to written contracts and does not implicate the parol evidence rule, the fatal flaw in the defendants' argument is that the manual that was in place in 1995 no longer existed. Neither the plaintiff nor Countrywide had that manual. The court did order the plaintiff to produce a portion of the 2001 manual relevant to the completion certificate, which the plaintiff did.

The defendants were not precluded in any way from cross-examining the witness on the absence of the manual. The defendants did not object at trial to the agreement on any other ground such as relevance or lack of authentication. We therefore conclude that the court did not abuse its discretion in admitting the agreement into evidence.

II

The defendants next raise several claims concerning the court's award of damages. We will address each in turn.

A

The defendants' first claim regarding damages is that the court improperly...