Opinion
FSTCV126014644S
07-05-2017
Shane Butler et al. v. Charles O'Connor et al
UNPUBLISHED OPINION
SUPPLEMENTAL MEMORANDUM OF DECISION
A. William Mottolese, Judge Trial Referee.
A.
On January 18, 2017 this court filed its decision after trial, post-trial briefing and subsequent oral argument. In that decision the court awarded judgment to the defendant-counterclaim plaintiff (" O'Connor") on his first counterclaim which sought foreclosure of his mechanic's lien and although concluding that O'Connor had fully performed his contract did not award judgment on the second count which claimed breach of contract. The court then ordered a hearing to establish the updated debt, appraised value and form of judgment. At that hearing held April 6, 2017 O'Connor's counsel revealed to the court that a recent title examination disclosed that a notice of lis pendens had never been filed as required by G.S. § 49-39 thereby creating the issue of whether the lien foreclosure judgment could stand. The court ordered additional briefing and heard oral argument on May 31, 2017. For the reasons that follow the court concludes that the foreclosure judgment cannot stand and that the judgment must therefore and is hereby revised so as to dismiss the foreclosure count and award judgment on the second count of the counterclaim which claims breach of contract.
G.S. § 49-39 in pertinent part provides at follows:
A mechanic's lien shall not continue in force for a longer period than one year after the lien has been perfected, unless the party claiming the lien commences an action to foreclose it, by complaint, cross complaint or counterclaim, and records a notice of lis pendens in evidence thereof on the land records of the town in which the lien is recorded within one year from the date the lien was recorded . (Emphasis added.)
As the parties have pointed out in their briefs, there is a split of authority within the Superior Court over the proper interpretation of the decisions of our Appellate Court in H.G. Bass Associates, Inc. v. Ethan Allen, Inc., 26 Conn.App. 426, 601 A.2d 1040 (1992) and First Constitution Bank v. Harbor Village Ltd. Partnership, 37 Conn.App. 698, 657 A.2d 1110 (1995). Preliminarily, it is observed that decisions of coordinate members of the Superior Court are not binding on this court save in the exceptional case where the doctrine of law of the case applies which is not present in this case. Mayer v. Historic District Commission, 325 Conn. 765, 779, 160 A.3d 333 (2017) (Superior Court decision not binding statewide). While the issue requires this court's own independent analysis, the reasoning of these cases is nevertheless helpful to the process.
In H.G. Bass Associates the plaintiff was a subcontractor who sought to foreclose on a mechanic's lien against the property owner but failed to record its notice of lis pendens within one year of the recordation date of the mechanic's lien. Relying on well-established precedent in the cases of Diamond National Corporation v. Dwelle, 164 Conn. 540, 325 A.2d 259 (1979) and Persky v. Puglisi, 101 Conn. 658, 127 A. 351 (1925) the court concluded that although these cases dealt with the time requirement that a mechanic's lien foreclosure action be commenced within one year after recording the lien, the court expanded that analysis to include the one-year recording requirement. The court simply treated each of the requirements in pari passu concluding that " [t]he plain intent of this statute is to clear the title to the premises unless an action of foreclosure is brought within the time limited for the continuance of the lien. The phrase 'no mechanic's lien shall continue in force' is conclusive." Id. at 429. Equally clear is that the court held that " the trial court was without jurisdiction to render judgment for the plaintiff." Id. at 432 (emphasis added).
In First Constitution Bank the plaintiff sought foreclosure of its mortgage on property on which F had filed a mechanic's lien. In asserting priority the plaintiff claimed that F's mechanic's lien was not valid because the notice of lis pendens which was recorded within one year of the filing of the mechanic's lien was deficient because it failed to set forth the names of the parties as required by G.S. § 52-325 which provides in relevant part as follows:
NOTICE OF LIS PENDENS. (a) In any action in a court of this state or in a court of the United States (1) the plaintiff or his attorney, at the time the action is commenced or afterwards, or (2) a defendant, when he sets up an affirmative cause of action in his answer and demands substantive relief at the time the answer is filed, if the action is intended to affect real property, may cause to be recorded in the office of the town clerk of each town in which the property is situated a notice of lis pendens, containing the names of the parties, the nature and object of the action, the court to which it is returnable and the term, session or return day thereof, the date of the process and the description of the property . . . This section shall be construed to apply to mechanic's lien . . . (Emphasis added.)
The notice of lis pendens was recorded within one year of the filing of F's mechanic's lien. In rejecting the plaintiff's position the court reviewed the nature and purpose of a lis pendens.
The purpose of the lis pendens in the context of a mechanic's lien is the same as it is in any other situation in which real property is the subject of litigation; namely, it is intended to give constructive notice to persons seeking to purchase or encumber property after the recording of a lien or the commencement of a foreclosure suit . . . Thus, if a person has actual notice of the lien and a suit commenced thereon, that actual notice may take the place of constructive notice imparted by the filing of a lis pendens . . . To hold otherwise would exalt constructive notice over actual notice. (Citations omitted; internal quotation marks omitted.) Meyer, Kasindorf & Mancino v. Lafayette Bank & Trust Co., 34 Conn.Supp. 84, 86-87, 377 A.2d 861 (1977). (Alternate citation omitted.) Id. at 703.
O'Connor relies on the following underscored statement of the court to support his claim that as long as the Butlers had actual knowledge of the mechanic's lien, which from the evidence they clearly did, such knowledge is a substitute for constructive notice which is created by the recording of the lis pendens.
Since the filing of notice of lis pendens is not a condition precedent to a right of action; Meyer, Kasindorf & Mancino v. Lafayette Bank & Trust Co., supra, 34 Conn.Supp. 87; and since the plaintiff, or its predecessor, had actual notice of the action for foreclosure of the mechanic's lien, Fairfield's lien is not invalid to this plaintiff. The plaintiff suffered no prejudice. Id. at 704. (Emphasis added.)
It is crucial to note at this point that the rationale of Meyer, Kasindorf & Mancino was based entirely on the mechanic's lien jurisprudence of the State of California. The Appellate Court in H.G. Bass determined that that reliance was misplaced because the California mechanic's lien statute sets no time limit within which the party seeking to foreclose the lien must record the notice of lis pendens. Therefore, there are several reasons why the First Constitution Bank case is inapposite and therefore not determinative of the present case. 1) Unlike in H.G. Bass, the controversy was not between lienor and lienee but rather between a lienor and a third party who sought priority over the lien in that foreclosure action but was not a party to the lien; 2) First Constitution was decided on the basis on G.S. § 52-325 and not § 49-29; 3) the sole issue in First Constitution was whether the omission by the mechanic's lienor of the names of subsequent encumbrances as required by § 52-325 invalidated the lien. G.S. § 49-29 was not even mentioned in the court's opinion; 4) the same court in H.G. Bass rejected the reasoning of the Meyer case as applied to § 49-29 for the reason set forth above; 5) while the actual notice rule may apply to a third party under § 52-325 it does not apply to a mechanic's lienee under § 49-29. See also Cadlerock Properties Joint Venture, L.P. v. Ashford, 98 Conn.App. 556, 562, n.3, 909 A.2d 964 (2006); 6) since the court's assertion that the filing of a notice of lis pendens is not a condition precedant to a right of action it was not necessary to the holding of the case so it is deemed to be obiter dictum. Therefore, stare decisis does not attach to this commentary. Balentine's Law Dictionary, 3rd Ed. at 346; Gladys v. Planning and Zoning Commission, 57 Conn.App. 797, 805, 750 A.2d 507 (2000).
To summarize, the court now holds that because of the failure to record the notice of lis pendens the court had no jurisdiction to adjudicate the first count of the counterclaim and hereby dismisses that count. In all other respects the court reaffirms the judgment of January 19, 2017 and hereby enters judgment for the defendant-counterclaim plaintiff on the breach of contract count.
The plaintiff argues that the breach of contract count should also be dismissed because both it and the foreclosure count rely on the existence of the mechanic's lien. Specifically, they posit that because the breach of contract count " incorporates and realleges" paragraphs 1-4 of the foreclosure count, the lien was an essential part of both counts. The court concludes that this argument is based on a faulty reading of the counterclaim. Paragraphs 1-4 do nothing more than allege a contractual relationship with the plaintiffs and do not even mention the mechanic's lien. For this reason this claim is rejected.
B.
On April 1, 2017 O'Connor filed as part of his motion for strict foreclosure a request that the court award him attorneys fees on the foreclosure pursuant to G.S. 49-33(i) and 52-249 because the judgment was granted on the foreclosure count. At the May 31 hearing he requested that in the alternative, the fees be awarded pursuant to the second sentence of section XV of the contract between the parties which provides as follows:
All attorney fees that shall be incurred in the resolution of disputes shall be the responsibility of the party not prevailing in the dispute.
The plaintiff objects to these fees a) because the affidavit of attorneys fees filed in support of the claim was not " authenticated, " b) much of the time recorded in the affidavit related to the foreclosure count and in the absence of an allocation between the foreclosure count and the breach of contract count attorneys fees should be disallowed; c) the fees are disproportional to the amount in controversy; d) any time charge involving codefendant Neil Hayes should be disregarded.
Authentication
Even when a party is entitled to such fees by contract or under statute, however, the party seeking the award of fees must first satisfy a threshold evidentiary showing. See, e.g., Smith v. Snyder, 267 Conn. 456, 471, 839 A.2d 589 (2004); Appliances, Inc. v. Yost, 186 Conn. 673, 680, 443 A.2d 486 (1982); see also Shapero v. Mercede, 262 Conn. 1, 6, 808 A.2d 666 and n.3 (2002). As we have explained previously, " courts have a general knowledge of what would be reasonable compensation for services which are fairly stated and described . . . and . . . may rely on their general knowledge of what has occurred at the proceedings before them to supply evidence in support of an award of attorneys fees . . . Even though a court may employ its own general knowledge in assessing the reasonableness of a claim for attorneys fees, we also have emphasized that no award for an attorneys fee may be made when the evidence is insufficient." (Citations omitted; internal quotation marks omitted.) Smith v. Snyder, supra, 471-72; see also Storm Associates, Inc. v. Baumgold, 186 Conn. 237, 246, 440 A.2d 306 (1982) (" a contract clause providing for reimbursement of 'incurred' fees permits recovery upon the presentation of an attorney's bill, [as] long as that bill is not unreasonable [on] its face and has not been shown to be unreasonable by countervailing evidence or by the exercise of the trier's own expert judgment"). (Alternate citations omitted.) Total Recycling Services of Connecticut, Inc. v. Connecticut Oil Recycling Services, LLC, 308 Conn. 312, 327-28, 63 A.3d 896 (2013).
In the present case more than an " attorney's bill" was presented to the court. Counsel submitted a detailed affidavit which contains entries of time in hourly or fractional units, specifies the particular attorney who perform the service with the hourly rate for that attorney. This document is referred to as " the factual predicate." Gagne v. Vaccaro, 118 Conn.App. 367, 371-2, 984 A.2d 1084 (2009). Moreover, the court conducted an evidentiary hearing in which the plaintiff's counsel had the right of and did cross examine O'Connor's attorney as to various aspects of his claim for fees.
Allocation of Fees
The plaintiffs argue that because the court ultimately dismissed the foreclosure count, all of the time devoted to that part of the case should be disallowed. Our courts have addressed the more severe situation where a case is tried on the basis of multiple claims not all of which are based on contractual provisions which allow for the prevailing party to recover attorneys fees. In Total Recycling, supra, the court concluded . . ." when certain claims provide for party's recovery of contractual attorneys fees but others do not, a party is nevertheless entitled to a full recovery of reasonable attorneys fees if an apportionment is impracticable because the claims arise from a common factual nucleus and are intertwined." Id. at 333. Applying this principle to the present case, an examination of the affidavit of debt discloses that certain of the time entries clearly relate solely to the mechanic's lien as do certain of the disbursements. Accordingly, counsel is directed to file a revised affidavit within two weeks so as to cull out all entries which clearly apply solely to the mechanic's lien because they are not intertwined with the time devoted to the breach of contract count. See, e.g. certain entries at page 6 which clearly relate solely to the mechanic's lien count.
Disproportionality
The plaintiffs claim that the total attorneys fee of $54, 785 is disproportionate to the $16, 472.29 amount of the judgment and should therefore be disallowed. The plaintiff has offered no authority for this proportion. " Where a claim is asserted in the statement of issues but thereafter receives only cursory attention in the brief without substantive discussion or citation of authorities, it is deemed to be abandoned." (Citations omitted; internal quotation marks omitted.) Merchant v. State Ethics Commission, 53 Conn.App. 808, 818, 733 A.2d 287 (1999). These same principles apply to claims raised in the trial court. (Alternative citation omitted.) Connecticut Light & Power Co. v. Dept. of Public Utility Control, 266 Conn. 108, 120, 830 A.2d 1121 (2003).
We are able to glean from our case law that the size of the recovery is a factor that should be considered in determining whether an attorneys fee is reasonable but is not dispositive. McGrath v. Gallant, 143 Conn.App. 129, 139, 69 A.3d 968 (2013). And so, an attorneys fee of roughly 11/2 times the amount of the recovery has been found not to be unreasonable. Rostad v. Hirsch, 148 Conn.App. 441, 85 A.3d 1212 (2014). Since the court has ordered elimination of certain charges shown in the affidavit a final determination will have to await completion of that assignment. At this point the court is unable to access the revised total but can and does make the following observations. Attorney O'Connell is an experienced trial attorney of long standing at the bar; that the hourly rate of $300 for his time is consonant with, if not lower than, the hourly litigation rate that is customarily charged by local attorneys in similar cases in this judicial district; there appears to be no unnecessary or duplicated charges; the nature of the case though not complex involved some novel issues; most of the trial time was necessitated by the plaintiff's case in chief which of course O'Connor was compelled to defend. See § 1.5 of the Rules of Professional Conduct.
Plaintiffs have filed their motion for attorneys fees in which counsel's hourly rate is as high as $450 and totals $63, 262.60. " A trial court properly may rely on a financial affidavit as well as its own general knowledge and involvement with the trial to ascertain a reasonable attorneys fee." William Raveis Real Estate, Inc. v. Zajaczkowski, 172 Conn.App. 405, 424, 160 A.3d 363 (2017).
Neil Hayes
Plaintiffs argue that they should not be charged for time which O'Connor devoted to former defendant Neil Hayes because the plaintiffs' complaint was withdrawn as to him. Nevertheless, Hayes' architectural firm remained in the case as a defaulted defendant and because the allegations against Hayes' firm of Mingolello and Hayes, PC implicated O'Connor it was entirely reasonable, in fact obligatory, for O'Connor's counsel to have participated in discovery taken by the plaintiffs against Hayes and his firm. Such time charges are entirely justified.
Plaintiff's Attorneys Fees
As mentioned, the plaintiffs have filed their own motion for attorneys fees based on the theory that because the court credited to the plaintiffs their cost of the building permit ($1, 373) and because the contract was clear that it was O'Connor's responsibility, the plaintiffs have prevailed within the meaning of section XV of the contract. G.S. § 52-139 provides in pertinent part as follows:
Sec. 52-139. Set-off of mutual debts; procedure. (a) In any action brought for the recovery of debt, if there are mutual debts between the plaintiff or plaintiffs, or any of them, and the defendant or defendants, or any of them, one debt may be set off against the other. No debt claimed by assignment may be set off unless the plaintiff had notice, at the commencement of the action, that the debt was due the defendant. If it appears upon the trial that the plaintiff is indebted to the defendant, the court shall give judgment for the defendant to recover the balance due of the plaintiff with these costs, except that no judgment may be given against the plaintiff to recover only a part of the balance of a debt due the defendants . (Emphasis added.)
Subsection (c) makes it clear that the plaintiffs in this case who are the counterclaim defendants have recovered only a small part of the debt which they asserted against the counterclaim plaintiff and therefore have not " prevailed" as specified in the contract. Accordingly, the plaintiffs' motion for attorneys fees is denied.
The word is defined in Webster's New World Dictionary, 2d Col. Ed. at 1127 as " to gain advantage; be victorious; predominate."
The final pending motion is O'Connor's motion for postjudgment interest under G.S. § 37-3a (#166) in which O'Connor seeks an award of ten percent. Whether to award interest and at what rate depends upon equitable considerations that must be applied by the court. Interest on the judgment is awarded at the rate of five percent.
SO ORDERED.