Walpole Woodworkers, Inc. v. Manning, 31447.

11 A.3d 165

126 Conn.App. 94

WALPOLE WOODWORKERS, INC.

v.Sid MANNING.

No. 31447.

Appellate Court of Connecticut.

Argued Sept. 22, 2010.

Decided Jan. 18, 2011.

David L. Gussak, Farmington, for the appellant (defendant).

Brent M. Stratton, for the appellee (plaintiff).

DiPENTIMA, C.J., and ALVORD and DUPONT, Js.

DUPONT, J.

The defendant, Sid Manning, appeals from the judgment of the trial court in favor of the plaintiff, Walpole Woodworkers, Inc., in this action for the balance due on a contract to install a fence at the defendant's residence. On appeal, the defendant claims that the trial court improperly concluded that (1) the defendant's conduct amounted to bad faith, (2) the plaintiff was entitled to full recovery under the parties' contract, including interest, attorney's fees and costs, and (3) the defendant's attempt to rescind the contract and his demand for recoupment of sums paid to the plaintiff were unavailing.¹ The primaryissue to beresolved is whether the plaintiff is entitled to recover, pursuant to the contract, interest, attorney's fees and costs, despite the court's finding that the plaintiff violated some provisions of the Home Improvement Act (act), General Statutes (Rev. to 2003) § 20-429,² because of the defendant's bad faith as found by the court. We conclude that the plaintiff is entitled to recover the value of the work performed but is not entitled to recover, under the "bad faith" exception, additional damages provided for in the contract when the contract is otherwise unenforceable due to the plaintiff's violation of the act. We, therefore, reverse the judgment of the trial court only insofar as it awarded interest, attorney's fees and costs to the plaintiff. We otherwise affirm the judgment of the trial court.

The following facts and procedural history are relevant to our resolution of this appeal. By complaint filed May 14, 2007, the plaintiff alleged that it had performed all of its obligations under a contract with the defendant but that the defendant had not satisfied his obligation to pay for the services rendered. The plaintiff sought to recover money damages, past due balances for services rendered, attorney's fees, interest and costs as provided for in the contract, and such other relief as the court deemed proper. The defendant filed two special defenses alleging that the plaintiff had failed to perform its work in a workmanlike manner, thereby breaching the contract, and that it violated the act in certain enumerated ways. The defendant also filed a counterclaim. In its response to the special defenses and counterclaim, the plaintiff alleged that the defendant had filed his defenses pursuant to the act in bad faith.

Pursuant to Practice Book § 23-53,³ the case was referred to an attorney fact finder, who heard evidence on the matter on January 26 and February 9, 2009, and, who, on April 20, 2009, made the findings of fact, which follow. The parties enteredinto a written contract, pursuant to which the plaintiff agreed to install a fence and the defendant agreed to pay $22,318. At the time the defendant executed the contract, he paid a deposit of $11,000. The work was substantiality completed in November, 2004. In May, 2005, the plaintiff sought payment for the balance owed. The defendant refused, stating that his small dog could escape under the fence. The plaintiff designed a free "fix" by adding additional fencing around the bottom of the fence, but the defendant still refused to pay the balance due. In January,2006, the plaintiff sent the defendant a written demand for payment under the contract, including attorney's fees, interest and costs as provided therein and commenced litigation thereafter.

The fact finder found that the contract did not comply with the act pursuant to § 20-429(a)(7).⁴ Nonetheless, the fact finder found the issues in favor of the plaintiff, including a finding that the defendant invoked the act in bad faith, and recommended that the court render judgment for the balance due, as well as for attorney's fees, costs and interest per the contract. The defendant objected to the court's acceptance of the findings of fact made by the attorney fact finder. See Practice Book § 23-57. After a hearing on the objection, the court sustained the objection only as to the attorney's fees and reduced the amount of attorney's fees awarded. The court rendered judgment in favor of the plaintiff in accordance with the fact finder's report, as modified by orders of the court. This appeal followed. Additional facts will be set forth as necessary.

In each of his claims, the defendant challenges both the factual conclusions reached by the attorney fact finder and the factual and legal conclusions of the trial court. We set forth our standard of review. "Attorney fact finders are empowered to hear and decide issues of fact on contract actions pending in the Superior Court....On appeal, [o]ur function ... is not to examine the record to see if the trier of fact could have reached a contrary conclusion.... Rather, it is the function of this court to determine whether the decision of the trial court is clearly erroneous.... This involves a two part function: where the legal conclusions of the court are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts set out in the memorandum of decision; where the factual basis of the court's decision is challenged we must determine whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.... 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.)

Lewis v. Frazao Building Corp., 115 Conn.App. 324, 329, 972 A.2d 284 (2009).

"Finally, we note that, because the attorney [fact finder] does not have the powers of a court and is simply a fact finder, [a]ny legal conclusions reached by an attorney [fact finder] have no conclusive effect.... The reviewing court is the effective arbiter of the law and the legal opinions of [an attorney fact finder], like those of the parties, though they may be helpful, carry no weight not justified by their soundness as viewed by the court that renders judgment." (Internal quotation marks omitted.) Id., at 329-30, 972 A.2d 284. With the foregoing in mind, we now turn to the defendant's specific claims.

I

We first address the claim that the defendant's conduct did not amount to bad faith. The defendant maintains that there was evidence before the fact finder thathe disputed the quality of the plaintiff's work, which he claims is insufficient to constitute bad faith. The plaintiff claims, in response, that the facts found show the defendant's bad faith intent to avoid paying the balance due on the contract without any defense to payment. We agree with the plaintiff and uphold the trial court's finding of bad faith.

We set forth the applicable principles of law. The act, pursuant to § 20-429(a), provides that no home improvement contract shall be valid or enforceable against a homeowner unless it meets certain enumerated criteria. "The [act] is a remedial statute that was enacted for the purpose of providing the public with a form of consumer protection against unscrupulous home improvement contractors.... The aim of the statute is to promote understanding on the part of consumers with respect to the terms of home improvement contracts and their right to cancel such contracts so as to allow them to make informed decisions when purchasing home improvement services." (Citation omitted.) Wright Bros. Builders, Inc. v. Dowling, 247 Conn. 218, 231, 720 A.2d 235 (1998). "In Barrett Builders v. Miller, [215 Conn. 316, 328, 576 A.2d 455 (1990) ], our Supreme Court stated, in dictum, that a homeowner could not avail himself of the protection afforded to him by § 20-429 if he invoked the statute in bad faith. Our Supreme Court subsequently applied the bad faith exception in Habetz v. Condon, 224 Conn. 231, 618 A.2d 501 (1992), in which it upheld a trial court's factual finding of bad faith." New England Custom Concrete, LLC v. Carbone, 102 Conn.App. 652, 660-61, 927 A.2d 333 (2007).

In Lucien v. McCormick Construction, LLC, 122 Conn.App. 295, 296, 998 A.2d 250 (2010), this court reversed a trial court's ruling, which had concluded that a homeowner had invoked the act in bad faith. " Habetz [ v. Condon, supra, 224 Conn. 231, 618 A.2d 501] made it clear ...that mere disagreement about contract performance does not suffice to establish bad faith. Habetz defined bad faith as involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive.... Bad faith means more than mere negligence; it involves a dishonest purpose." (Internal quotation marks omitted.) Lucien v. McCormick Construction, LLC, supra, at 300, 998 A.2d 250. In Lucien, the trial court had concluded that the contractor had met its burden to establish the homeowner's bad faith, reasoning that the homeowner's representation by counsel throughout the negotiation processand the homeowner's failure to raise the noncompliance with the act until the defendant raised a claim of nonpayment established bad faith. Id., at 301, 998 A.2d 250. This court concluded that there was "simply ... nothing in the stipulated facts that can legally and logically support the court's conclusion that the plaintiff acted with a dishonest purpose in claiming that the defendant violated the act." Id., at 302-303, 998 A.2d 250.

In the...