Opinion
HHDCV156062349S
07-12-2017
AIG Corp. v. Loureiro Engineering Associates, Inc
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (#111)
Cesar A. Noble, Judge.
The plaintiff, AIG Corporation (AIG), commenced this action through service upon the defendant, Loureiro Engineering Associates, Inc., (LEA), on September 18, 2015. Before the court is the defendant's motion for summary judgment.
FACTS
The plaintiff's two-count complaint sounding in breach of contract and unjust enrichment alleges the following facts. On June 26, 2014, the plaintiff and defendant entered into a purchase order to perform asbestos abatement at a Pratt & Whitney owned site (the project). The detailed scope of work document (SOW) included the removal of 4100 linear feet of asbestos pipe insulation located in a trench approximately 820 linear feet long. The purchase order price of $78, 813 permitted the plaintiff to " field verify trench conditions prior to bidding." In March 2014, AIG scheduled a site visit to inspect the subsurface conditions of the project, but was " denied meaningful access" to the trench. As a result, in formulating its bid, the plaintiff relied upon the subsurface conditions of other trenches it previously worked on at other Pratt & Whitney sites. On July 8, 2014, the plaintiff commenced work on the project, and discovered that the subsurface conditions were materially different from the subsurface conditions it relied upon when submitting its bid. The height and width of the tunnels were materially different causing reduced productivity and increased labor costs; the asbestos pipe insulation was materially different than anticipated; the electrical conduit configurations were different than anticipated; and, a substantial amount of debris on the trench floor was encountered. The plaintiff then submitted two change orders to the defendant to recover the actual costs of performing the work. The first change order sought to recover $198, 150; the second change order sought to recover $35, 890. The defendant rejected the change orders and refused to pay them. The plaintiff claims that this refusal to approve the change orders is a material breach of the purchase order.
On November 30, 2015, the defendant filed its answer, which generally denies the allegations and leaves the plaintiff to its proof. Additionally, the defendant alleges one special defense: that any losses suffered by the plaintiff were due to its own negligence by submitting its bid " without properly, fully and completely inspecting the subsurface conditions."
On January 13, 2017, the defendant filed its motion for summary judgment, accompanied by a memorandum of law. The defendant argues that the parties contracted for the work to be performed for a specific, lump sum amount of $74, 813, for which the plaintiff has already been paid. The defendant further argues that the plaintiff's bid price was based upon unilateral assumptions, and that the additional amount it seeks to recover now is significantly greater than the agreed-upon contract price. Moreover, the basis for the plaintiff's breach of contract and unjust enrichment claims are based upon its allegation that it was denied meaningful access to the trench, yet prior to submitting its bid the plaintiff did not request additional inspection of the subsurface conditions of the job site. Therefore, the defendant did not breach the contract; any losses suffered by the plaintiff were not caused by the defendant; and, the defendant was not unjustly enriched by the work performed by the plaintiff, as the work was performed for the benefit of Pratt & Whitney. In sum, the defendant argues that there is no genuine issue of material fact that the defendant is entitled to judgment on the breach of contract count.
As for the unjust enrichment claim in count two, the defendant argues that the plaintiff impermissibly asserts both a breach of contract claim and an unjust enrichment claim in the same count. Additionally, the defendant argues that the plaintiff is not entitled to recover on the ground of unjust enrichment as both parties fully performed pursuant to the terms of the contract. In support of its motion, the defendant submits the affidavit of Brian Cutler, President of LEA; a copy of the SOW dated March 14, 2014, and the revised SOW dated March 28, 2014; a copy of the plaintiff's bid; a copy of the proposal submitted by LEA to Pratt & Whitney; a copy of the purchase order; a copy of a letter sent by AIG to LEA dated October 14, 2014; a copy of a letter sent by AIG to LEA dated February 27, 2015; a copy of a letter sent by the plaintiff's counsel to the defendant's counsel dated August 4, 2015 requesting approval of the change orders.
For purposes of this memorandum, the court will refer to the revised Scope of Work document dated March 28, 2014 as the operative Scope of Work document.
The plaintiff filed its memorandum in opposition on March 3, 2017, countering that there is a factual dispute about whether the plaintiff was granted access to the site pursuant to the express terms of the purchase order. Additionally, the plaintiff argues that it may alternatively pursue a remedy for unjust enrichment, where recovery is unavailable under the contract. In support of its argument, the plaintiff submits the affidavit of John Nericcio, project manager for AIG; a copy of the March 14, 2014 SOW and March 28, 2014 SOW; and, the deposition of Hugo DelRosso, an unsuccessful bidder for the project.
On March 21, 2017, the defendant submitted a reply memorandum asserting that the plaintiff cannot avoid a contractual obligation when it could have taken steps to avoid the excess costs of performing the work. The defendant argues that the plaintiff did not request an inspection of the subsurface materials prior to submitting its bid, thus it bore the risk of its own mistake. Moreover, the defendant argues that it relied on the plaintiff's bid when it submitted the overall bid to Pratt & Whitney, and that the plaintiff cannot now attempt to alter the contract terms.
The parties appeared at short calendar on March 27, 2017, to argue their respective positions. The plaintiff submitted a supplemental memorandum in support of its opposition on March 31, 2017, arguing that the subsurface materials were not discoverable prior to bidding despite the contract terms permitting access to inspect the job site, and that because the subsurface conditions could not have been reasonably anticipated, it is entitled to additional compensation. The defendant filed a supplemental memorandum on April 10, 2017, countering that the cases cited by the plaintiff in its supplemental memorandum are inapposite, thus unpersuasive in demonstrating that there is a genuine issue of material fact requiring the parties to proceed to a trial.
LEGAL STANDARD
" Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried . . . However, since litigants ordinarily have a constitutional right to have issues of fact decided by a jury . . . the moving party for summary judgment is held to a strict standard . . . of demonstrating his entitlement to summary judgment." (Citation omitted; footnote omitted; internal quotation marks omitted.) Grenier v. Commissioner of Transportation, 306 Conn. 523, 534-35, 51 A.3d 367 (2012). " [T]he party moving for summary judgment . . . is required to support its motion with supporting documentation, including affidavits." (Internal quotation marks omitted.) Romprey v. Safeco Ins. Co. of America, 310 Conn. 304, 324 n.12, 77 A.3d 726 (2013). " Likewise, [t]he existence of the genuine issue of material fact must be demonstrated by counteraffidavits and concrete evidence." (Internal quotation marks omitted.) United States Bank, N.A. v. Foote, 151 Conn.App. 620, 632-33, 94 A.3d 1267, cert. denied, 314 Conn. 930, 101 A.3d 952 (2014).
" [S]ummary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Stuart v. Freiberg, 316 Conn. 809, 820-21, 116 A.3d 1195 (2015).
" [T]he genuine issue aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred . . . A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case." (Citation omitted; internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002).
" In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact . . . but rather to determine whether any such issues exist." (Internal quotation marks omitted.) RMS Residential Properties, LLC v. Miller, 303 Conn. 224, 233, 32 A.3d 307 (2011). " In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard." (Internal quotation marks omitted.) Romprey v. Safeco Ins. Co. of America, supra, 310 Conn. 319-20. " To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45]." Ferri v. Powell-Ferri, 317 Conn. 223, 228, 116 A.3d 297 (2015).
DISCUSSION
I
Count One: Breach of Contract
" The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." CCT Communications, Inc. v. Zone Telecom, Inc., 324 Conn. 654, 667-68, 153 A.3d 1249 (2017).
The defendant argues that the parties contracted for a lump sum of $74, 813; that the defendant has paid the plaintiff; and that the additional amount the plaintiff seeks to recover is significantly greater than the agreed-upon contract price. Moreover, the basis for the plaintiff's claim is based upon the allegation that it was denied meaningful access to the trench, yet prior to bidding the plaintiff did not request additional inspection to verify the subsurface conditions of the site. The plaintiff counters that there is a factual dispute about whether the plaintiff was granted access to the site pursuant to the express terms of the purchase order.
In support of its motion for summary judgment, the defendant submits the affidavit of Brian Cutler, President of LEA, who avers that it was made clear to bidders at the pre-bid meeting that some portions of the site were visible for viewing, and other portions were not. Cutler affidavit, Entry No. 112, paragraph 12. The affidavit further states that Pratt & Whitney informed bidders that they could return to the site, at which time Pratt & Whitney would provide additional access to bidders who wanted to inspect the job site. Cutler affidavit, Entry No. 112, paragraph 13. The defendant neither prevented nor interfered with the plaintiff's ability to inspect the job site. Cutler affidavit, Entry No. 112, paragraphs 37, 38. If the plaintiff believed that it could not properly inspect the job site, it could have submitted a conditional bid, which is a bid contingent upon the existence or nonexistence of certain conditions. Cutler affidavit, Entry No. 112, paragraph 33. The defendant stressed the importance of reviewing the SOW and providing an all-inclusive lump sum proposal to potential bidders. Cutler affidavit, Entry No. 112, paragraph 14.
The SOW, which is incorporated by reference into the purchase order; see Defendant's Exhibit D; includes the following project specifications: the 820-foot, concrete trench was constructed in approximately 1958, between two buildings. The trench was formerly used to house various types of piping and conduits. The trench is " approximately 6 feet wide by 10 feet deep, " is partially underground, and is " predominately covered by removable concrete slab cover sections." Defendant's Exhibit A, page 1. Figures 4 and 5 of the SOW, demonstrate that portions of the trench are partially covered by a driveway, and grass at different points. Defendant's Exhibit A, page 11. In two instances, the SOW states that contractors may field verify the trench before bidding. Defendant's Exhibit A, pp. 1, 4.
Defendant's Exhibit E is a copy of a letter sent by the plaintiff to the defendant dated October 14, 2014, outlining the difficulties encountered by the plaintiff's workers. Difficulties included: " massive amounts of debris" on the floor, the height of the tunnels fluctuates " anywhere from 9 feet to 4.5 feet, " a section of the tunnel is nearly impossible to walk through, and pipes coated with five inches of a dense-hard brown fibrous material covered with black tar require removal. Defendant's Exhibit E, pp. 1-2.
The document includes a detailed diagram depicting the trench's approximate dimensions and construction. Defendant's Exhibit A, Figure 7, p. 13. The diagram does not provide the exact specifications of the trench, but does indicate that the concrete corners within the tunnels may vary in size anywhere from six feet wide by six feet deep to eight feet wide by eight feet deep. The specifications also reference which portions of the trench are covered by asphalt or solid concrete.
In its motion for summary judgment and memorandum of law, the defendant emphasizes that the facts themselves support the conclusion that the defendant did not breach its contract with the plaintiff, and that the plaintiff's losses were not caused by the defendant. Based upon the evidence presented by the defendant, the court is inclined to agree that the evidence supports the assertion that the defendant did not breach the purchase order, and that there is no real issue to be tried. Therefore, the court must examine the evidence submitted by the plaintiff to determine whether it has come forth with evidence sufficient to demonstrate the existence of genuine issue of fact. See Ferri v. Powell-Ferri, supra, 317 Conn. 228.
In support of its opposition, the plaintiff submits the SOW; the affidavit of John Nericcio, project manager for AIG; and the deposition of Hugo DelRosso, an unsuccessful bidder for the project. Nericcio's affidavit avers that he personally prepared AIG's bid for the project. Plaintiff's Exhibit 1, paragraph 3. Nericcio attended two walk-throughs of the project site, coordinated by the defendant, in order to field verify the project conditions. Plaintiff's Exhibit 1, paragraphs 8, 9. That on each occasion the plaintiff was " denied meaningful access to verify the trench conditions." Plaintiff's Exhibit 1, paragraph 10. That the only visible portions of the trench were located on the far ends of each side of the trench, and that the 820-foot length of the trench was not visible or accessible. Plaintiff's Exhibit 1, paragraphs 11-12. " At no time did LEA state that removal of the concrete coverings was an option to view any portion of the trench." Plaintiff's Exhibit 1, paragraph 13. As a result, the plaintiff prepared its bid based upon the conditions of previous asbestos removal jobs it had performed for Pratt & Whitney at other job sites. Plaintiff's Exhibit 1, paragraph 14. The plaintiff commenced work on the project on July 8, 2014, and " immediately encountered subsurface conditions that were materially different from the conditions identified in the bid materials and other trenches for which the plaintiff had furnished asbestos abatement services to Pratt & Whitney." Plaintiff's Exhibit 1, paragraphs 14 & 15. Therefore, the plaintiff submitted change orders for additional compensation totaling approximately $272, 963. Plaintiff's Exhibit 1, paragraph 17. The defendant has refused the plaintiff's demands for payment. Plaintiff's Exhibit 1, paragraph 18.
DelRosso's deposition avers that the SOW contained a description of the trench. Plaintiff's Exhibit 3, p. 13. That the trench is located beneath the surface, and is largely covered by grass or asphalt. Plaintiff's Exhibit 3, pp. 13, 14, 16. That there was an opportunity to enter one of the buildings and view the end of the trench from the lower level, but that there were no other points at which the potential bidders could see the subsurface conditions. Plaintiff's Exhibit 3, p. 15.
It is undisputed that the parties had reached an agreement, pursuant to the terms of the purchase order, and it is also undisputed that the plaintiff performed the asbestos abatement, for which the defendant paid the agreed-upon contract price. The question remaining before the court is whether the defendant breached the terms of the agreement.
The SOW unambiguously represented that portions of the site were not visible, that large portions of the trench were covered by asphalt or grass, that limited portions of the trench could be viewed, and that field verification would be desirable. The affidavit of Brian Cutler avers that Pratt & Whitney offered to make additional access to the trench available to potential bidders. The affidavit of John Nericcio, submitted by the plaintiff, demonstrates that the plaintiff, despite being aware that it did not see the entirety of the trench, formulated its bid based upon subsurface conditions at other Pratt & Whitney job sites. The plaintiff was mistaken in its assumptions.
" When the language of a contract is ambiguous, the determination of the parties' intent is a question of fact . . . [W]here there is definitive contract language, [however] the determination of what the parties intended by their contractual commitments is a question of law." (Citation omitted; internal quotation marks omitted.) Cruz v. Visual Perceptions, LLC, 311 Conn. 93, 101, 84 A.3d 828, 833 (2014).
" When construing a contract, we seek to determine the intent of the parties from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction . . . [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and . . . the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract . . . When only one interpretation of a contract is possible, the court need not look outside the four corners of the contract . . . When the language of a contract is ambiguous, the determination of the parties' intent is a question of fact . . . When the language is clear and unambiguous, however, the contract must be given effect according to its terms, and the determination of the parties' intent is a question of law." (Internal quotation marks omitted.) Gabriel v. Gabriel, 324 Conn. 324, 341, 152 A.3d 1230 (2016).
The cases that the plaintiff cites to in support of its position are distinguishable, as the contracts at issue in those cases contained specific provisions allowing for additional compensation in certain circumstances. See Kovacs Construction Corp. v. Water Pollution & Control Authority, 120 Conn.App. 646, 652, 992 A.2d 1157, cert. denied, 297 Conn. 912, 995 A.2d 639 (2010) (contract allowed contractor claiming entitlement to additional compensation for extra work required to provide notice of claim within ten days of receipt of challenged instruction or is otherwise barred from having claim considered); Iacobelli Construction, Inc. v. City of Monroe, 32 F.3d 19, 23 (2d Cir. 1994) (government construction contract containing differing site conditions clause allows contractor to receive " equitable adjustment" if subsurface or latent physical condition at site differs materially from what is indicated in contract).
In the present case, the contract between the parties does not contain such a provision. Therefore, the plaintiff was responsible for taking the necessary steps to verify the accuracy of its assumptions prior to submitting its bid. See Shoreline Communications, Inc. v. Norwich Taxi, LLC, 70 Conn.App. 60, 68, 797 A.2d 1165 (2002). Given the plaintiff's limited knowledge of the site, the plaintiff bore the risk of mistake by treating that limited knowledge as sufficient upon the submission of its bid to the defendant. Id., 66. The plaintiff could have discovered that the subsurface materials were materially different than its expectations, had it taken the opportunity to request additional access to the trench for further verification prior to submitting its bid. Moreover, the defendant did not prevent the plaintiff from further access to the trench. See id., 67-69. Thus, the defendant cannot avoid its contractual obligations simply because it did not verify the accuracy of its own expectations. Accordingly, the motion for summary judgment is granted as to count one of the plaintiff's complaint.
II
Count Two: Unjust Enrichment
A
In its memorandum of law, the defendant argues that the plaintiff's unjust enrichment count is rendered insufficient given that it fully incorporates the paragraphs of the breach of contract count. Courts have held that alternative pleadings must be set forth in separate counts. Bratter v. Nova 22 Constr., Inc., Superior Court, judicial district of Hartford, Docket No. CV-12-6033502-S (March 27, 2014, Huddleston, J.); Berman & Sable v. Nat'l Loan Investors, Superior Court, judicial district of Waterbury, Complex Litigation Docket, Docket No. CV-00-0167145-S (January 16, 2002, McWeeny, J.); Leshine v. Goodrich, Superior Court, judicial district of New Haven, Docket No. CV-01-0448323-S (May 15, 2003, Licari, J.); Whitby School, Inc. v. Grenaille, Superior Court, judicial district of Stamford, Docket No. CV-03-0195602-S (December 29, 2003, Lewis, J.T.R.) (36 Conn.L.Rptr. 285, ); Heaven v. Timber Hill, LLC, Superior Court, judicial district of Stamford, Docket No. CV-02-0188007-S (December 6, 2002, Lewis, J.), aff'd, 96 Conn.App. 294, 900 A.2d 560 (2006). In this case, the plaintiff fully incorporates all of the enumerated paragraphs of count one into the unjust enrichment claim alleged in count two. Thus, count two alleges both a breach of contract claim and an unjust enrichment claim. The court agrees with the defendant that the plaintiff has impermissibly incorporated its breach of contract claim within its unjust enrichment claim.
B
" [W]herever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract, restitution of the value of what has been given must be allowed . . . Under such circumstances, 'the basis of the plaintiff's recovery is the unjust enrichment of the defendant' . . . A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another . . . With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard . . . Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy . . . Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment." (Citations omitted; internal quotation marks omitted.) New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451-52, 970 A.2d 592 (2009).
" This doctrine is based upon the principle that one should not be permitted unjustly to enrich himself at the expense of another but should be required to make restitution of or for property received, retained or appropriated . . . The question is: Did [the party liable], to the detriment of someone else, obtain something of value to which [the party liable] was not entitled?" Id.
" It is often said that an express contract between the parties precludes recognition of an implied-in-law contract governing the same subject matter." (Internal quotation marks omitted.) Id., 454. " Nevertheless, when an express contract does not fully address a subject, a court of equity may impose a remedy to further the ends of justice." (Internal quotation marks omitted.) Id., 455. " A claim for unjust enrichment is an equitable claim. In matters of equity, the court is one of conscience which should be ever diligent to grant relief against inequitable conduct, however ingenious or unique the form may be." (Internal quotation marks omitted.) Id., 459.
" Courts and commentators long have recognized the conceptual distinction between damages and restitution. Damages are intended to provide a victim with monetary compensation for an injury to his person, property or reputation . . . whereas restitution aims to deprive a defendant of unjustly obtained benefits . . . The restitution claim stands in flat contrast to the damages action . . . The damages recovery is to compensate the plaintiff, and it pays him . . . for his losses. The restitution claim, on the other hand, is not aimed at compensating the plaintiff, but at forcing the defendant to disgorge benefits that it would be unjust for him to keep." (Citation omitted; internal quotation marks omitted.) Id., 460.
The defendant argues that the plaintiff cannot obtain relief by way of an unjust enrichment claim because the existence of an express contract between the parties precludes such recovery. Alternatively, the defendant argues that the plaintiff has no right to restitution, because all duties under the contract have been performed. The plaintiff counters that it may plead an alternative cause of action, because it does not have a remedy under the terms of the contract.
The purchase order between the parties incorporates the scope of work document, and includes the plaintiff's bid price of $74, 813. Neither the purchase order, nor the SOW, memorialize the intent of the parties as to the procedure to be followed in the event that materially different subsurface conditions are encountered. It could be argued that the contract represents the parties' entire agreement that asbestos abatement will cost $74, 813 and no more. Alternatively, it could be argued that " when an express contract does not fully address a subject, a court of equity may impose a remedy to further the ends of justice." New Hartford v. Connecticut Resources Recovery Authority, supra, 291 Conn. 455.
In the present case, the plaintiff has not sufficiently demonstrated that the defendant unjustly obtained benefits resulting from the plaintiff's efforts. The plaintiff performed asbestos abatement on a parcel of property which is neither in the possession nor control of the defendant. In fact, the entity obtaining a benefit to the plaintiff's detriment is a third party who is not named as a defendant to this action. Because the plaintiff is unable to demonstrate that the defendant benefitted from the plaintiff's services, the court cannot therefore conclude that the defendant unjustly did not pay for the plaintiff's services. It is for the foregoing reasons that the motion for summary judgment is granted as to count two of the plaintiff's complaint.
CONCLUSION
The defendant's motion for summary judgment is granted as to both counts of the plaintiff's complaint.