Watson Real Estate, LLC v. Woodland Ridge, LLC

208 Conn.App. 115

264 A.3d 96

WATSON REAL ESTATE, LLC

v.WOODLAND RIDGE, LLC, et al.

AC 43006

Appellate Court of Connecticut.

Argued January 6, 2021

Officially released October 5, 2021

Mario R. Borelli, for the appellant (named defendant).

Jeffrey J. Mirman, Hartford, for the appellee (plaintiff).

Cradle, Alexander and DiPentima, Js.

ALEXANDER, J.

The present appeal originated from an escrow agreement entered into by the parties in conjunction with the purchase of a lot in a residential subdivision. In Watson Real Estate, LLC v. Woodland Ridge, LLC , 187 Conn. App. 282, 284–85, 202 A.3d 1033 (2019), this court affirmed the judgment of the trial court rendered in favor of the defendant Woodland Ridge, LLC.¹ Specifically, we rejected the claims of the plaintiff, Watson Real Estate, LLC, that the trial court (1) improperly failed to find that a meeting of minds existed between the parties as to the specifications of the common driveway that the defendant was required to install under the escrow agreement, (2) improperly failed to find that the defendant had breached the escrow agreement by not reimbursing the plaintiff for costs incurred for work that the defendant was required to complete and (3) abused its discretion in denying the plaintiff's request to amend its complaint to add a claim for unjust enrichment. Id.

Both prior to and following the plaintiff's appeal, the defendant sought attorney's fees pursuant to a prevailing party clause contained in the parties’ agreement. The trial court denied the defendant's attempts to recover attorney's fees, and this appeal followed.

In this appeal, the defendant claims that (1) the trial court improperly denied its claim for attorney's fees, pursuant to a prevailing party clause in the parties’ escrow agreement, and (2) it was entitled to appellate attorney's fees. We conclude that the court failed to exercise its discretion with respect to the defendant's request for attorney's fees. Accordingly, we reverse the judgment of the trial court and remand the case for further proceedings.

This court previously set forth the relevant facts and procedural history underlying the defendant's claim for attorney's fees. "The defendant was the owner and developer of a four lot residential subdivision located on the westerly side of Woodland Street in Glastonbury. The subdivision consists of two front lots abutting Woodland Street (lots 1 and 2) and two rear lots abutting the western boundaries of the front lots (lots 3 and 4). A common driveway providing ingress and egress to the subdivision runs west from Woodland Street past the entrances to lots 1 and 2 and terminates at the entrances to the rear lots.

"In May, 2006, H. Kirk Watson, a member of the plaintiff, entered into an agreement with the defendant for the purchase of lot 1. At the time of the execution of the purchase agreement, the common driveway had been paved only from Woodland Street to a point 118 feet before the entrance to lot 1; the remainder of the driveway, including the portion passing along the entrance to lot 1, remained unpaved. Consequently, Watson, in his capacity as a member of the plaintiff, entered into an agreement with the defendant and Attorney Peter J. Alter to create an escrow fund from a portion of the defendant's proceeds from the sale of lot 1 to assure the defendant's completion of the common driveway and certain other improvements and construction that remained to be completed (escrow agreement). Under the escrow agreement, the defendant was to deposit with the escrow agent, Alter, the sum of $51,000, which represented a fair estimate of the cost of completion of the [w]ork.

"The particular items that remained to be completed were set forth in a punch list that was attached to the escrow agreement as exhibit A. Pursuant to exhibit A, the defendant was required to complete the common driveway to the point at which it becomes an individual driveway for each approved lot, but the defendant was not to put the final course of bituminous pavement on the common driveway until construction of all four houses [was] complete (as indicated by the issuance of a certificate of occupancy), or five (5) years from the date of [the escrow agreement], whichever shall first occur. The stated rationale for this delay was to avoid damage to the final pavement as may be caused by heavy construction vehicles using the driveway during home construction. As Watson later testified at trial, at the time he executed the escrow agreement, he believed that this language required the defendant to initially extend the existing layer of pavement along the remainder of the driveway and, then, at the appropriate time, install a second layer of pavement over the entire length of the driveway. Per exhibit A, the defendant was also required to install a common electric power service from which each lot could secure individual service.

"Because the parties recognized that the work needed to be completed before the plaintiff could secure a building permit and a certificate of occupancy, the escrow agreement provided for a procedure by which the plaintiff could contract with a third party to complete the work and seek reimbursement from Alter out of the escrow funds if the defendant failed to complete the work in a timely manner. Pursuant to this procedure, the plaintiff was to give written notice to the defendant that the plaintiff's construction project required that the work be completed within a reasonable time. If the defendant subsequently failed to complete the work within thirty days, the plaintiff was then authorized to contract for the completion of the work, and, upon [submission] of an invoice or contract for performance from a [third-party] contractor, [Alter] shall advance the funds from the escrow agreement to satisfy the invoice or contract provisions.

"Upon the closing of the transaction, Watson took title to the property in the name of the plaintiff and began developing the property. Between the time of closing and the completion of the plaintiff's house, no additional paving of the common driveway was done. Watson was told by the town, however, that in order to obtain a certificate of occupancy, the paved portion of the common driveway needed to be extended to the entrance of the plaintiff's property. Consequently, in 2008, Watson contracted with a third party to pave this portion of the common driveway at a cost of $4914, which Watson paid. The remainder of the driveway, however, remained a dirt road. Watson also paid $530.70 to Megson & Heagle Civil Engineers & Land Surveyors, LLC (Megson & Heagle), to satisfy an unpaid bill incurred by Daniel Zak, an agent for the defendant, in connection with the preparation of a Connecticut Light and Power Company easement map (easement map) for the common driveway.

"Between 2008 and 2011, no additional paving was done on any portion of the common driveway. In September, 2011, Zak notified Alter that the defendant intended to complete all of the remaining work required under the escrow agreement. The defendant, thereafter, engaged R & J Paving, LLC (R & J Paving), to pave the final portion of the common driveway, from the entrance of the plaintiff's property to the entrances to lots 3 and 4. The defendant did not , however , have a second , final layer of pavement installed , which Watson believed was required under the escrow agreement. Upon receipt from Zak of the paving invoice, Alter released $9000 to R & J Paving and divided the remainder of the escrow funds between Zak and Leonard Bourbeau, a member of the defendant. The plaintiff was never reimbursed for the costs it expended in extending the common driveway to the entrance to its property and settling the invoice for the easement map. The plaintiff, however, had not submitted invoices for these expenditures to Alter as required under the escrow agreement.

"The plaintiff commenced the present action in March, 2013. In count two of the operative, revised complaint—the only count at issue in this appeal—the plaintiff alleged, inter alia, that the defendant breached the escrow agreement by improperly seeking the release of escrow funds. The plaintiff further alleged that, as a result, it sustained damages, including the costs to complete the work that the defendant had failed to perform. The matter was tried to the court on September 20 and 22, 2016.

"At trial, the plaintiff appeared to abandon its claim that the defendant improperly sought the release of the escrow funds. The plaintiff , instead , proceeded under a theory that the defendant breached the escrow agreement by failing to install a second , final layer of pavement over the common driveway. The principal issue at trial was whether the defendant ’s obligation under the agreement to install a final course of bituminous pavement was intended to require the defendant to apply two layers of pavement. On this issue the parties presented contradictory evidence.

* * *

"In its memorandum of decision issued on January 10, 2017, the court ... determined that it could not find that there was a meeting of the minds as to the specifics of the common driveway and concluded that the plaintiff had failed to sustain its burden of proving its breach of contract claim . The court, therefore, rendered judgment in favor of the defendant on count two of the plaintiff's revised complaint." (Footnotes omitted; emphasis altered; internal quotation marks omitted.) Id., at 285–92, 202 A.3d 1033.

In the prior appeal filed by the plaintiff, we first considered whether the trial court improperly found that a meeting of the minds between the parties had not occurred with respect to the number of layers of pavement to be applied to the common driveway. Id., at 294, 202 A.3d 1033. We rejected this claim. Id., at 296–97, 202 A.3d 1033. Next, we declined to review the plaintiff's claim that the defendant had breached the escrow agreement by not reimbursing the plaintiff for costs it had incurred on the...