Town of New Milford v. Standard Demolition Servs., Inc.

212 Conn.App. 30

274 A.3d 911

TOWN OF NEW MILFORD

v.STANDARD DEMOLITION SERVICES, INC.

AC 43874

Appellate Court of Connecticut.

Argued November 30, 2021

Officially released April 26, 2022

Raymond A. Garcia, New Haven, with whom were Nyle K. Davey, Hartford, and, on the brief, Lauren Lyngholm Crowe and Jonathan A. Krumeich, for the appellant-cross appellee (defendant).

John D. Tower, New Milford, with whom was Graham W. Moller, for the appellee-cross appellant (plaintiff)

Bright, C. J., and Elgo and Bear, Js.

BEAR, J.

The defendant, Standard Demolition Services, Inc., appeals from the judgment of the trial court rendered in favor of the plaintiff, the town of New Milford, on the plaintiff's complaint for breach of a contract entered into by the parties and as to all counts of a counterclaim filed by the defendant. On appeal, the defendant claims that (1) the court misapplied state and federal environmental regulations, (2) the court erred in not finding that the contract was impossible to perform, (3) the court improperly determined that the plaintiff lawfully had terminated the contract,¹ and (4) evidence of certain change orders executed by the plaintiff in connection with a subsequent contract with a different contractor, pursuant to which the plaintiff had agreed to modify terms of that contract, constituted admissions that the plaintiff's contract with the defendant was defective and could not be performed by the defendant as written. The plaintiff has cross appealed, claiming that the court erred in its award of damages to the plaintiff. We affirm the judgment of the court in favor of the plaintiff on its complaint for breach of contract and as to all counts of the defendant's counterclaim, but we reverse it in part with respect to the award of damages and remand the case for a new hearing in damages.

At the trial of this matter, which spanned over twenty-two days, the parties testified, presented lay and expert witnesses, and submitted 273 documents into evidence. In a comprehensive memorandum of decision, the court, Shaban , J ., found the following facts: "The plaintiff is the owner of an industrial property located at 12 Scovill Street in New Milford, which it acquired through a tax foreclosure in 1999. The property consists of fifty-three acres [and] includes an approximately 315,000 square foot vacant brass mill factory contaminated with polychlorinated biphenyls (PCBs) and asbestos containing materials .... The plaintiff renamed the site the ‘Century Enterprise Center’ and hired consultants to help evaluate the environmental hazards on the site. Under the guidance of the consultants, the plaintiff made decisions about how it would apply to the United States Environmental Protection Agency (EPA) for permission to demolish and clean up the property and engage contractors to perform the work.

"Prior to its involvement with the defendant, the plaintiff had already completed two phases of the work in its effort to clean up the property. In phases I and II of the project, the plaintiff's consultants, Tighe & Bond, had characterized the structural steel on the site as ‘non-porous.’² The EPA approved the work proposed by the plaintiff through its consultants for phases I and II and it was completed. For phase III of the project, the demolition, abatement, and remediation work, the plaintiff hired TRC Environmental Corporation (TRC) as its consultant and project manager. In performing its evaluation of the site, TRC reviewed and relied on the findings of the prior consultants from the phase I and II portions of the project. During the earlier phases, there had been extensive communication between the prior consultants and the EPA about the project. TRC found that the work had been allowed to proceed as proposed and that wipe sampling of ‘porous’ surfaces had been done.³ In 2015, after TRC set the scope of work for phase III, the plaintiff applied for and secured a $2.5 million grant from the Department of Economic and Community Development ... for the project.

"Thereafter, the plaintiff issued a Notice to Bidders [notice] inviting prospective contractors to provide bids for the demolition, abatement, and remediation of the property based on the proposed plan developed by TRC.... Bid packages were made available to all of the prospective bidders as part of the notice, which included the proposed contract documents.⁴ The documents were also available through an on-line website. The notice recited that additional documents were available for review in a public reading room at the New Milford Public Works facility. Electronic thumb drives were also made available that included all historical records, plans, drawings, studies, and other relevant information from phases I and II.... The bid forms provided to the prospective contractors included a line item for the scrap value of the structural steel [that] the contractor would be allowed to keep. All of the public information in the plaintiff's possession regarding all three phases of the project, including correspondence with the EPA, was made available to prospective bidders for inspection and review. This included a facility investigation document prepared by Tighe & Bond that referenced the presence of PCBs throughout the building's interior that had likely been spread through dust. ... This also included an engineering evaluation/cost analysis relative to the interior of the building. ... On May 26, 2015, a mandatory prebid meeting was held by the plaintiff with the prospective bidders. ... Following that meeting, on June 2, 2015, the plaintiff held an open house and walk-through at the site for all prospective bidders. ... The defendant attended the open house and physically viewed the site. Both prior to and following the meeting and open house, and prior to the submission of its bid, the defendant submitted to the plaintiff multiple requests for information about the project to which the plaintiff responded. ...

"In addition, the plaintiff invited all potential bidders to submit in writing any questions they may have had about the project. By letter of June 12, 2015, the plaintiff provided all potential bidders with the responses to a list of those questions that had been submitted as of June 10, 2015, in a document described as ‘Clarification No. 1.’ ... Several questions dealt with the sampling and disposal of PCB contaminated materials. The fundamental response to each of these questions was that the contractor selected for the project would be responsible for the sampling and disposal of all such materials. The plaintiff conveyed that its only obligation was to do verification sampling of items left on-site after the job was completed. ...

"On June 15, 2015, following completion of its inquiries and review of the bid specifications, the defendant submitted its bid in the amount of $2,713,950 on the forms supplied by the plaintiff, which included Clarifications Nos. 1 and 2 as addenda. ... The defendant's bid did not provide for the remediation, abatement, and disposal of the contaminated structural steel on the site based on its belief that the information made available by the plaintiff represented or implied that the structural steel was not contaminated and could be recycled without remediation. ...

"By letter of July 16, 2015, the plaintiff notified the defendant that it was the successful bidder. ... On September 1, 2015, the EPA issued a five page approval letter authorizing the plaintiff to move forward with phase III of the project subject to the conditions set forth in the letter. ... At the time of its bid, the defendant was aware that the EPA could impose additional conditions on the work to be done beyond those set forth in the proposed contract. Paragraph 13 of the approval letter provides: ‘The PCB cleanup standard for porous surfaces (i.e., concrete) and soil shall be less than or equal to ... 1 part per million ("ppm") for unrestricted use or disposal. The PCB cleanup standard for non-porous surfaces (e.g., overhead cranes, steel beams) shall be less than ... 10 µ/100 cm for unrestricted disposal and/or recycling. (a) PCB contaminated wastes shall be removed and disposed of as detailed in the [attached Administrative Record], except as follows ... (ii) Steel beams shall be disposed of as a [greater than or equal to] 50 ppm PCB waste or alternatively shall be sampled to determine PCB disposal requirements [and] (iii) If samples are collected, sampling analytical results and proposed waste disposal details shall be submitted to [the] EPA for review prior to removal of these wastes from the [s]ite.’ ... The EPA's definition of the steel beams as non-porous was consistent with the definition that had been given by Tighe & Bond in phase II of the project. ...

"The EPA's letter was accompanied by two attachments, the first of which set forth the ‘PCB Cleanup and Disposal Approval Conditions,’ and the second of which was identified as the ‘Administrative Record (Notification).’ ... Paragraph 11 (a) [of attachment one] required the plaintiff to provide to the EPA ‘a certification signed by its selected abatement/demolition contractor [the defendant], stating that the contractor(s) has read and understands the Notification, and agrees to abide by the conditions specified in this [a]pproval ....’

"Attachment [two] consists of a series of documents and correspondence reviewed by the EPA prior to the issuance of its approval ... [some of which included] discussions of PCB contamination of various materials including overhead cranes and steel beams. Also, § 5.8 of the phase I PCB Source Removal Notification dated December, 2004, prepared by Tighe & Bond references PCB wipe sample test results for nonporous materials such as building interior walls and beams. ...

"In its September 1, 2015 approval letter, the EPA noted that ‘[a]ttachment [two] provides a list of supporting information for the [p]hase III project ... which [the] EPA considered for this ...