Opinion
HHDCV176080338S
10-23-2019
Stefan GARDNER et al. v. Kathleen ALDERMAN et al.
UNPUBLISHED OPINION
File Date: October 24, 2019
OPINION
Cobb, J.
On June 4, 2019, after a jury trial, the jury rendered a verdict in favor of the plaintiff/counterclaim defendant, Stefan Gardner, and against the defendants in the amount of $379,000 reduced by 10% to $341,100, attributable to the plaintiff’s contributory negligence. The jury also awarded the plaintiff’s spouse, Adele Gardner, $50,000 on her loss of consortium claim. The defendants filed various post-trial motions to set aside the verdict, for mistrial and a remittitur. The court has denied those motions in a separate memorandum of decision.
The defendant/counterclaim plaintiff, Twenty Two Hill, LLC, brought a counterclaim against the plaintiff/counterclaim defendant for indemnification pursuant to the subcontractor agreement it had with the plaintiff. The plaintiff denied the essential allegations of the defendant’s counterclaim, and asserted special defenses that the contract is not enforceable because it is an adhesion contract and violates public policy. The parties agreed that the defendant’s counterclaim and plaintiff’s special defenses would be tried to the court, simultaneously with the jury trial. In view of the jury’s verdict in favor of the plaintiffs against the defendant, the defendant now seeks judgment in its favor on the counterclaim and damages in the amount of its portion of the jury verdict attributable to it as well as reasonable attorneys fees. The plaintiff asserts that the subcontractor agreement is invalid and unenforceable. Resolution of the defendant’s counterclaim and the plaintiff’s special defenses requires the court to examine the facts in relation to the subcontractor agreement.
The defendant also asserted other counterclaims that it did not pursue.
The court refers to the counterclaim plaintiff and defendant in the underlying action simply as the defendant or Twenty Two Hill and the counterclaim defendant and plaintiff in the underlying action, Stefan Gardner, as the plaintiff.
The facts relevant to the counterclaim are as follows:
The plaintiff was an experienced field inspector, having worked in the field for three years prior to September 12, 2016. On September 12, 2016, the plaintiff entered into a contract with the defendant to work as a field inspector. The contract was entitled "Subcontractor Agreement Terms and Conditions of Contract." The plaintiff’s execution of this agreement was "a condition of his working as a field inspector for the defendant. Under the agreement, the work to be performed was described as "inspection services on residential and commercial properties as specifically directed by Contractor’s client." Section 6 of the agreement provided that the plaintiff was "an independent contractor" to the defendant. The agreement required the plaintiff to, at his own expense, "procure, carry and maintain on all its operations workers’ compensation and employer’s liability insurance coverage for all of its employees, ..." The plaintiff did not procure this insurance as required by the agreement.
The plaintiff was paid for his work under the agreement.
Section 9 of the agreement pertained to "indemnification" and provides:
Subcontractor shall indemnify and hold harmless Contractor against any claims, damages, losses and expenses, including legal fees, including property damage, bodily injury and/or death, arising out of or resulting from performance of the contracted work to the extent caused in whole or in part by the Subcontractor or anyone directly or indirectly employed by the Subcontractor.
Section 19 of the agreement, entitled "Construction" provides that:
Contractor and Subcontractor hereby acknowledge that both parties participated equally in the negotiation of this Agreement and that no court construing this Agreement shall construe it more stringently against one party than against the other, regardless of which party’s counsel drafted this Agreement.
There is no evidence provided that the plaintiff was in anyway forced to sign the agreement or to work as a field inspector for the defendant.
On or about September 30, 2016, after entering into the agreement, the plaintiff received a work order from the defendant to inspect property located at 143 Redstone Street, Bristol (the property), which was in foreclosure. Although the plaintiff had not conducted an inspection of the property prior to September 30, 2016, other inspectors had done so and there were several prior inspection reports that indicated that there was a broken basement stair in the property. The plaintiff had access to these prior inspection reports and was supposed to read them prior to inspecting the property. The plaintiff reviewed certain of the prior reports but did not see the note that the basement stair was broken.
When the plaintiff was walking down the basement stair to inspect the basement, he fell on the broken stair and sustained a significant ankle injury. As a result, he brought this negligence action against the Estate of Kathleen Alderman, the owner of the property, C.I.T. Bank, N.A., which held a mortgage on the property, National Field Representatives, Inc. (NFR), defendant C.I.T. Bank’s mortgage field inspection company, and Twenty Two Hill, LLC (Twenty Two), which contracted with defendant NFR to provide mortgage field inspection services on the property and engaged the plaintiff as its subcontractor on the property.
Prior to trial, the plaintiff withdrew the action against Kathleen Alderman’s son, Raymond Alderman.
The plaintiff’s spouse, Adele Gardner, brought a claim for loss of consortium.
All of the defendants asserted the special defense of contributory negligence.
The jury found the issues for the plaintiff Stefan Gardner, and awarded damages in the amount of $379,000. Because the jury found that the plaintiff was 10% at fault for his injuries, the jury reduced the award to $341,100. The jury awarded plaintiff Adele Gardner $50,000 on her loss of consortium claim.
The jury determined the percentage of negligence attributable to the plaintiff, Stefan Gardner, and the defendants as follows:
C.I.T. Bank 40%
NFR 25%
Twenty Two Hill 25%
Estate of Kathleen Alderman 0%
The plaintiff 10%
In the subcontractor agreement, the plaintiff agreed to indemnify and hold harmless Twenty Two Hill for injuries, damages, losses and legal fees arising out of the performance of the contracted work "to the extent caused in whole or in part by the Subcontractor ..." The jury having found the plaintiff ten percent at fault for his own injuries, Twenty Two Hill claims that the plaintiff is obligated to indemnify it because the plaintiff’s injuries and damages were caused "in part" by the plaintiff.
DISCUSSION
Twenty Two argues that the plaintiff breached the subcontractor agreement by (i) failing to hold harmless and indemnify Twenty Two from the underlying action in accordance with Section 9 of the agreement and (ii) failing to obtain workers’ compensation coverage pursuant to Section 10 of the agreement. To prevail on its counterclaim, Twenty Two must prove by a preponderance of the evidence that (i) it had a valid contractual indemnification clause with the plaintiff pursuant to the subcontractor agreement and (ii) that the plaintiff breached the subcontractor agreement.
The plaintiff Stefan Gardner has the burden of proof by a preponderance of the evidence on his special defenses to the counterclaim. He argues that the subcontractor agreement, including the indemnification provision, is invalid (i) for lack of consideration, (ii) as against public policy, or (iii) as a contract of adhesion. For the following reasons, the court finds that Twenty Two Hill has sustained its burden by a preponderance of the evidence on its counterclaim, and the plaintiff has failed to prove its special defenses.
To state a contract-based indemnification claim, the claimant must allege either an express or implied contractual right to indemnification. Connecticut General Life Ins. Co. v. SVA, Inc., 743 F.Supp. 107, 110 (D.Conn. 1990). Generally, contractual indemnification claims that are based on written agreements are construed in accordance with the principles of contract law. See PSE Consulting, Inc. v. Frank Mercede & Sons, Inc., 267 Conn. 279, 290, 838 A.2d 135 (2004) ("Because the indemnity agreement is a written contract, our analysis of this issue must be guided by our well established principles of contract interpretation"). "Where there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law." Poole v. Waterbury, 266 Conn. 68, 88, 831 A.2d 211 (2003).
In Fifield v. South Hill Ltd. Partnership, the court considered whether an independent contractor had a contractual duty to indemnify a property owner and general contractor when one of its employees was injured while working on the property owner’s premises. Fifield v. South Hill Ltd. Partnership, 20 F.Supp.2d 366, 371 (D.Conn. 1998). There, the indemnification clause at issue provided that the independent contractor would indemnify the property owner and general contractor "for any liability for personal injury or property damage resulting only from [the independent contractor’s own] action or inaction." Because the court found that "[i]n this case, if [the property owner and general contractor] are liable to plaintiff, it will be for their own independent negligence and not for any negligence attributable to [the independent contractor]," Id., 372, it concluded that the independent contractor was not required to indemnify. However, had the independent contractor been found liable for any negligence, he would have been obligated under the agreement to indemnify the general contractor and property owner. Id., 371-72.
Similar to the agreement in Fifield, the indemnification clause between Twenty Two Hill and the plaintiff provides that the plaintiff subcontractor will indemnify Twenty Two for any personal injuries that were the result of his own negligence, "in whole or in part." Specifically, Section 9 states that that the plaintiff "shall indemnify ... [Twenty Two] against injuries, damages, losses ... [and] legal fees arising out of ... performance of the contracted work to the extent caused in whole or in part by the Subcontractor ..." The jury found that the plaintiff was liable for his own injuries "in part," by finding him 10% at fault. Therefore, pursuant to the indemnification clause of the subcontractor agreement, the plaintiff is obligated to indemnify Twenty Two.
Twenty Two claims that because Adele Gardner’s loss of consortium claim is derivative of Stefan Gardner’s personal injury claim, the plaintiff is also required to indemnify it on that count. The court agrees with Twenty Two Hill. In Connecticut Ins. Guaranty Ass’n v. Fontaine, 278 Conn. 779, 900 A.2d 18 (2006), the court addressed whether an insurance policy covered the loss of consortium claim of the injured plaintiff’s spouse. There, the court found that the loss of consortium claim fell within the coverage provision because the policy provided damages "because of bodily injury," and the spouse’s claim was inextricably linked to the injured plaintiff’s claim of bodily injury.
The subcontractor agreement provides that the plaintiff will indemnify "against injuries, damages, [and] losses" and is broad enough to encompass Adele Gardner’s loss of consortium claim. This conclusion is buttressed by the well settled principle in Connecticut that a loss of consortium claim is derivative of the injured spouse’s cause of action. See Hopson v. St. Mary’s Hospital, 176 Conn. 485, 408 A.2d 260 (1979). Accordingly, the court finds that the plaintiff must indemnify Twenty Two with regard to Adele Gardner’s loss of consortium claim.
With regard to Twenty Two Hill’s breach of contract claim: it is well settled that "[t]he 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." Meyers v. Livingston, Adler, Pulda, Meiklejohn and Kelly, P.C., 311 Conn. 282, 291, 87 A.3d 534 (2014). Here, the record reflects a copy of the subcontractor agreement between Twenty Two and the plaintiff. Section 10 of the agreement clearly requires that the plaintiff obtain workers’ compensation coverage. The plaintiff failed to maintain such coverage, breaching the contract. In addition, Twenty Two incurred costs and expenses as a consequence of the plaintiff’s failure to maintain the required insurance, resulting in damages. Section 9 of the agreement also provides, unambiguously, that the plaintiff shall indemnify Twenty Two. As discussed above, the jury found that the plaintiff’s negligence contributed "in part" to the injuries that he suffered while performing duties pursuant to the subcontractor agreement. Accordingly, the plaintiff’s failure to indemnify Twenty Two for these injuries amounts to a breach of the agreement. Twenty Two sustained damages as a result of the plaintiff’s failure to indemnify in incurring the expenses associated with this litigation. Therefore, the court finds that Twenty Two Hill has established that it is entitled to damages from the plaintiff’s breach of contract.
Turning to the plaintiff’s special defense to Twenty Two’s counterclaim, the plaintiff argues first that the subcontractor agreement, including the indemnification clause, is invalid due to a lack of consideration. It is well settled that "[w]hen an agreement is reduced to writing and signed by all parties, the agreement itself is substantial evidence that a meeting of the minds has occurred." Tedesco v. Agolli, 182 Conn.App. 291, 308, 189 A.3d 672, cert. denied, 330 Conn. 905, 192 A.3d 427 (2018); see also Tsionis v. Martens, 116 Conn.App. 568, 577-78, 976 A.2d 53 (2009) ("In light of the fact that a contract existed in written form that was signed by both parties, the plaintiff’s argument that a meeting of the minds did not occur is contrary to the evidence provided"); see also Reid v. Landsberger, 123 Conn.App. 260, 268, 1 A.3d 1149 ("Because the agreement existed in written form and was signed by all parties, [the] argument that a meeting of the minds did not occur is not supported by the evidence"), cert. denied, 298 Conn. 933, 10 A.2d 517 (2010).
Here, Twenty Two Hill has provided the court with a signed copy of the relevant subcontractor agreement. There was adequate consideration for the agreement, in that the plaintiff performed work for the defendant and was paid for that work. Plaintiff has not produced any credible evidence to establish the invalidity of this contract. Accordingly, the court rejects the plaintiff’s argument that the subcontractor agreement, including the indemnification clause, is void for lack of consideration.
Next, the plaintiff argues that the subcontractor agreement, including the indemnification clause, is void as against public policy. "The principle that agreements contrary to public policy are void should be applied with caution ..." Dougan v. Dougan, 114 Conn.App. 379, 389, 970 A.2d 131 (2009), aff’d, 301 Conn. 361, 21 A.3d 791 (2011). "Agreements contrary to public policy [are] those that negate laws enacted for the common good ..." State v. Lynch, 287 Conn. 464, 477, 948 A.2d 1026 (2008). A contract violates public policy when its "inherent purpose is to violate the law: however, competent persons have the utmost liberty of contracting and their agreements, voluntarily and fairly made, shall be held valid and enforced in the courts unless a violation of the law or public policy is clear and certain." Wheelabrator Environmental Systems, Inc. v. Galante, 136 F.Supp.2d 21, 30 (D.Conn. 2001). See also Haynes Construction. Co. v. Cascella & Son Const., Inc., 36 Conn.App. 29, 647 A.2d 1015 (1994) (The principle that agreements in violation of public policy will not be enforced applies where the inherent purpose of the contract is to violate the law).
The plaintiff has not proved that the subcontractor agreement violates public policy. His assertion that he was "placed under the control of the seller, subject to the risk of carelessness by the seller or his agents," is wholly unsubstantiated. Pursuant to the agreement, the plaintiff’s liability is as a result of his own negligence- not that of Twenty Two- thus, this argument fails.
In addition, the plaintiff has not produced any evidence to establish that the subcontractor agreement "negates laws enacted for the common good," or that the inherent purpose of the contract was to violate the law. In addition, Section 19 of the agreement provides that "both parties participated equally in the negotiation of this Agreement," and the plaintiff fails to produce any evidence rebutting this contractual assurance.
The plaintiff’s reliance on Hyson v. White Water Mountain Resorts of Connecticut, Inc., 265 Conn. 636, 829 A.2d 827 (2003), for the proposition that the contract is void as against public policy, is misplaced as this case lends support to Twenty Two’s claim. In Hyson, the Court found the relevant agreement void as against public policy because "the release signed by the plaintiff ... did not expressly provide that, by signing it, she released the defendant from liability for damages resulting from its negligence ..." Id., 644. There, the court reasoned that transferring liability to a customer for the Resort’s own negligence violated basic tenets of public policy. In contrast, here, Section 9 of the agreement clearly provides that "Sub-contractor shall ... hold harmless Contractor against any claims ... arising out of or resulting from performance of the contracted work to the extent caused in whole or in part by the Sub-contractor ..." This provision is different than the one in Hyson because it does not require the plaintiff to assume the risk of Twenty Two’s negligence; it only makes the plaintiff liable if he is himself negligent. The plaintiff has "failed to show that the [agreement] in question tends to impose any wrong, disadvantage or injury on the public or that it is prejudicial to the public good or in violation of established public policy." (Internal quotation marks omitted.) Collins v. Sears, Roebuck & Co., 164 Conn. 369, 377, 321 A.2d 444 (1973). Accordingly, the court rejects the plaintiff’s claim that the contract is void as against public policy.
The plaintiff argues that the subcontractor agreement, including the indemnification clause, is void as a contract of adhesion. "A contract of adhesion is a contract formed as a product of a gross inequality of bargaining power between parties." Klos v. Lotnicze, 133 F.3d 164, 168 (1997). "The court will find a contract of adhesion only when the party seeking to rescind the contract establishes that the other party used high pressure tactics or deceptive language, or that the contract is unconscionable." (Internal quotation marks omitted.) Id. "The most salient feature of [adhesion contracts] is that they are not subject to the normal bargaining processes of ordinary contracts, and they tend to involve standard form contracts prepared by one party in a weaker position, [usually] a consumer, who has little choice about the terms." (Internal quotation marks omitted.) Brown v. Soh, 280 Conn. 494, 504, 909 A.2d 43 (2006). Finally, "contracts entered into voluntarily by competent persons should be held valid and enforceable in the courts ... Thus, the impropriety injurious to the interests of society which will relieve a party from the obligation he or she has assumed must be clear and certain before the contract will be found void and unenforceable." (Citation omitted; internal quotation marks omitted.) 12 Havemeyer Place Co., LLC v. Gordon, 76 Conn.App. 377, 385, 820 A.2d 299, cert. denied, 264 Conn. 919, 828 A.2d 618 (2003).
The plaintiff argues that, despite Section 19 of the agreement’s (the construction section) assurance that the parties participated equally in the negotiation process, he did not have counsel and was not provided with an explanation of the contract terms during negotiation. However, "superior bargaining power of one party to a contract is not in itself enough to strike down a resultant contract as unconscionable." Fairfield Lease Corp. v. Romano’s Auto Service, 4 Conn.App. 495, 498-99, 495 A.2d 286 (1985). The plaintiff did not provide any credible evidence to establish that he lacked any meaningful choice about the terms of the contract, or that Twenty Two Hill used deceptive tactics during the negotiation process. Therefore, the court rejects the plaintiff’s defense that the agreement is void as a contract of adhesion.
Thus, the court concludes that the plaintiff has failed to prove his special defenses to the counterclaim.
Twenty Two argues that it is entitled to attorneys fees. "The general rule of law known as the American rule is that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception ... Connecticut adheres to the American rule ... The only exceptions are a specific contractual term ... or a statute." (Citations omitted; internal quotation marks omitted.) Marsh, Day & Calhoun v. Solomon, 204 Conn. 639, 652-53, 529 A.2d 702 (1987).
"In an indemnity agreement, attorneys fees are awarded for the cost of litigation arising out of the indemnity agreement but not allowed in an action to enforce the agreement itself." Burr v. Lichtenheim, 190 Conn. 351, 363, 460 A.2d 1290 (1983). "The only exception is a specific contractual term to the contrary," Id., 364, "that any costs include the cost of litigation to enforce the agreement." Marsh, 204 Conn. 709. In Burr, the indemnity agreement was limited in scope to "expenses ... incurred with any action brought to enforce [the defendants’] first refusal rights." Id., 364. The court reasoned that "this language allows no reasonable interpretation other than that attorneys fees would be limited to defense of the original action," and not to enforcement of the agreement itself. Id.
Here, like in Burr, the subcontractor agreement, upon which Twenty Two Hill relies, provides that the subcontractor will "hold harmless Contractor against any claims, damages losses and expenses, including legal fees ... arising out of or resulting from performance of the contracted work ..." Twenty Two Hill has not cited to any specific term authorizing attorneys fees for the enforcement of the indemnification agreement itself and the court finds that the agreement does not contain one. Therefore, the subcontractor agreement provides for attorneys fees incurred by Twenty Two Hill in defending the underlying negligence action, and not for its pursuit of its counterclaim for indemnification.
It is well settled that "a contract clause providing for reimbursement of incurred fees permits recovery upon the presentation of an attorney’s bill, so long as that bill is not unreasonable upon its face and has not been shown to be unreasonable by countervailing evidence." Storm Associates, Inc. v. Baumgold, 186 Conn. 237, 246, 440 A.2d 306 (1982). Here, Section 9 of the agreement provides that the plaintiff will be responsible for "legal fees ... arising out of or resulting from performance of the contracted work ..."
At trial Twenty Two Hill’s representative testified that it had incurred attorneys fees in this action and then later provided the affidavit of Bruce E. Newman, stating that the attorneys fees incurred total $40,095.05. Twenty Two Hill also provided an exhibit to the affidavit that included the firm’s invoices of the work performed on the file, and hourly billing rates of counsel who worked on the file. Although the June 11, 2019 affidavit of Bruce Newman states that the amount of $40,095 includes fees and expenses "in the defense of this litigation," the attached Exhibit A of the firm’s invoices demonstrates that that amount and the invoices also contain charges incurred in litigating the counterclaim under the subcontractor agreement. It does not appear that counsel for Twenty Two Hill maintained separate records or billings for its fees performed on the underlying negligence action and on the counterclaim.
It is for the court to attempt to review these bills and determine what fees are associated with the defense of the action as opposed to the counterclaim, and the court will not guess or speculate as to these amounts. Thus, because Twenty Two Hill has failed to provide the court with a proper affidavit and invoices as to fees incurred as to the defense of the negligence action, the court is unable to award attorneys fees.
CONCLUSION
For the foregoing reasons, the court finds in favor of Twenty Two with regard to its counterclaim, but against Twenty Two Hill as to its claim for attorneys fees, and against the plaintiff as to his special defenses.
The court does not render an amount of the judgment for Twenty Two Hill, except to say that the plaintiff shall indemnify and/or hold harmless the defendant for its twenty-five percent portion of the verdict.