F. Reid v. Landsberger

123 Conn.App. 260

1 A.3d 1149

Donald F. REID

v.Diana Sebastian LANDSBERGER et al.

No. 30472.

Appellate Court of Connecticut.

Argued Dec. 7, 2009.

Decided Aug. 17, 2010.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

G. Randall Avery, Stamford, for the appellant (named defendant).

Joseph C. Ventricelli, with whom, on the brief, was John A. Milici, Norwalk, for the appellees (defendant Julio Traslavina et al.).

BISHOP, GRUENDEL and BEACH, Js.

BEACH, J.

In this interpleader action, ¹ the defendant Diana Sebastian Landsberger appeals from the trial court's judgment rendered in accordance with the report of an attorney trial referee (referee). The court rendered judgment awarding the other defendants, Julio Traslavina and Maria Traslavina, $63,500 as liquidated damages for Landsberger's default under the terms of a contract for the sale of real property. ² On appeal, Landsberger claims that the court improperly (1) found that there was a meeting of the minds between the parties and, thus, a contract was formed, (2) concluded that Landsberger breached the residential real estate sales agreement (agreement) when she repudiated the agreement on the basis of the presence of wetlands on the property, (3) concluded that the sellers, the Traslavinas, did not breach the agreement when they represented to Landsberger that they had obtained the proper building permit and certificate of occupancy regarding the rear deck and (4) referred the case back to the same referee after having rejected that referee's first report. We reverse, in part, the judgment of the trial court and remand the case for further proceedings.

The following facts and procedural history are relevant to our resolution of these issues. In June, 2006, Landsberger, as the buyer, and the Traslavinas, as the sellers, entered into an agreement by which Landsberger was to purchase the Traslavinas' home located at 41 Arlington Road in Stamford. The plaintiff, Donald F. Reid, as counsel for the Traslavinas, prepared a contract to reflect the terms of the proposed sale and sent it to Harold F. Bernstein, counsel for Landsberger. This draft of the contract included a residential property condition disclosure report (report) pursuant to General Statutes § 20-327b. On the report, the Traslavinas indicated that the property did not contain any wetlands. The report states that all answers are certified by the Traslavinas “[t]o the extent of the Seller's knowledge....” It also states that the Traslavinas' representations do “not constitute a warranty to the buyer” and that the report “is not a substitute for inspections, tests, and other methods of determining the physical condition of the property.”

The agreement specifically referred to the report and stated that it was attached as a rider. On the same page, the contract also included paragraph 26 entitled “Representations.” This paragraph states: “Unless otherwise specified in writing to the contrary, none of the representations made in this Agreement including all Attachments shall survive delivery of the deed and all representations by SELLER are made to the best of SELLER's knowledge and belief. Further, said representations shall be as true and accurate at the time of closing as they were as of the date hereof. Except in the event of an intentional misrepresentation, if Purchaser discovers any material representation contained in this Agreement including all Attachments to be untrue or inaccurate, the remedy of the parties shall be those available to them in the event of a valid defect in or objection to title.” The contract also provided that if the seller could not produce a good and marketable title to the property, “then the SELLER shall be allowed a reasonable postponement of closing not to exceed thirty (30) days ... within which to perfect title. If at the end of said time the SELLER is still unable to deliver or cause to be delivered a deed or deeds conveying a good and marketable title to said Premises ... then the BUYER (i) may elect to accept such title as the SELLER can convey, without modification of the purchase price, or (ii) may reject such title. Upon such rejection, all sums paid on account hereof, together with any expenses actually incurred by the BUYER for attorneys' fees, nonrefundable fees of lending institutions, survey costs and inspection fees (the total cost of which shall not ... exceed the cost of fee title insurance based on the amount of the purchase price) shall be paid to the BUYER without interest thereon. Upon receipt of such payment, this Agreement shall terminate and the parties hereto shall be released and discharged from all further claims and obligations hereunder.”

Upon receiving the agreement, Bernstein contacted Reid to discuss certain changes he wanted made to it, including the inclusion of an additional rider. Reid agreed to the terms Bernstein proposed and agreed to the rider. The rider included a provision entitled “Certificate of Occupancy,” which states: “The Seller represents that during the period of his ownership a building permit and final Certificate of Occupancy were obtained whenever required for work done on the premises (including, but not limited to the Trex deck located at the rear of [the] premises) and that the Seller will provide Buyer with a copy of the Certificate of Occupancy at closing.” On June 14, 2006, Bernstein forwarded to Reid the new agreement signed by Landsberger. She also included her deposit of $63,500 with her signed agreement. On June 19, 2006, the Traslavinas signed the agreement. On June 21, 2006, Landsberger and the Traslavinas agreed to extend the date for resolution of the inspection contingency for radon, described in paragraph K of the rider.

Bernstein contacted Reid on June 20, 2006, after receiving the fully signed agreement, to discuss the terms of the deed restrictions referenced in the formal property description on schedule A. Reid informed Bernstein that he did not have a copy of the deed containing the restrictions. Bernstein obtained a copy of the restrictions and faxed it to Reid on June 21, 2006. The restrictions referred to the maintenance of a brook. This brook was no longer located on the property, but the reference caused Bernstein to be concerned that wetlands might be present on the property. On June 21, 2006, after discussing these concerns with Reid, Bernstein faxed him a letter stating that Landsberger intended to investigate the issue of wetlands and that Reid had agreed to inquire whether the Traslavinas were aware of any wetlands on the property. Bernstein advised Reid that if the investigation indicated that there was a flood or wetland condition, his client did not intend to proceed with the sale and would seek a return of her deposit.

Reid responded to Bernstein's letter by fax on the same day. He stated that the Traslavinas were not aware of any stream or wetlands on the property and that they did not have flood insurance. He provided the name of their insurer and agreed to provide the policy information at a later date. Bernstein then conducted a “municipal search” of the property and reviewed the records held by the city of Stamford environmental protection board.

His investigation revealed that a 1997 wetlands report and a 1997 engineer's map showed the existence of wetlands in a corner of the property. As a result, Bernstein wrote to Reid on June 30, 2006, seeking to terminate the contract because of the presence of wetlands on the premises. On the same day, Bernstein sent Reid another letter stating that his investigation also revealed that no building permit or certificate of occupancy had been obtained for work performed by the Traslavinas on the deck. Landsberger did not offer to extend time to cure the defect, and the Traslavinas did not request time. On July 5, 2006, the date set for closing passed. Reid commenced this inter-pleader action on August 16, 2006. The Traslavinas obtained a building permit and certificate of occupancy for the deck just prior to the start of the second trial in 2008.

On May 4 and 9, 2007, the referee conducted the first trial in this matter. With the consent of the parties, he did not provide a ruling within the 120 day period within which a referee is to issue a finding pursuant to Practice Book § 19-4. Therefore, the court sustained Landsberger's objection to the acceptance of the referee's report. The court then issued a supplemental order referring the matter back to the same referee.

The referee held a second trial on March 23 and April 2, 2008. At trial, Landsberger and Julio Traslavina testified that the presence of wetlands on the property would be an important condition to them. Bernstein testified that “it is extremely difficult, nearly impossible, to change wetlands designations because wetlands don't come and go.” Reid testified that the wetlands condition is “a curable situation-perhaps.... [W]ithin the cure period, he could have gotten a soil scientist to certify [that wetlands no longer existed on the property].” The referee issued his report on August 20, 2008, recommending that judgment enter in favor of the Traslavinas. Landsberger objected to the acceptance of the referee's report. The court issued a memorandum of decision filed October 16, 2008, accepting the referee's report in its entirety. In its judgment file, issued the same date, the court ordered that the Traslavinas retain the $63,500 deposit and recover statutory costs from Landsberger. This appeal followed.

I

Landsberger first claims that the court improperly determined that a contract existed. She asserts that there was no meeting of the minds because “both the sellers and the [purchaser] were factually mistaken as to two important issues at the time of entering the contract-the presence of a large area of wetlands regulation on the premises, and the lack of both a permit and a certificate of occupancy for the large rear deck on the property.” We dis...