Summary
awarding plaintiffs three times the amount paid to non-performing defendant
Summary of this case from Emigrant Mortg. Co. v. Travelers Prop. Cas. Corp.Opinion
DBDCV186025908S
06-18-2019
Lance WALSKY et al. v. Steven WALSH et al.
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
D’ANDREA, Robert A.
This case arises out of the plaintiffs’ Lance Walsky and Joan Walsky ("plaintiff Lance," "plaintiff Joan," and "plaintiffs" collectively, respectively) hiring of defendants Steven Walsh, Maria Walsh, and Maria Walsh D/B/A Ice Guys Refrigeration ("defendant Steven," "defendant Maria" and "defendant Ice Guys" respectively) to perform home improvement repairs to plaintiffs’ real property located at 8 Freedom Circle, Southbury, Connecticut ("home"). Plaintiffs allege that they contracted with all defendants to perform home improvements on their home, but the defendants engaged in performing home improvements without State of Connecticut issued home improvement licenses, while holding themselves out as home improvement contractors with the ability to perform the contracted home repairs. Plaintiffs allege that the defendants breached the contract entered into by the parties, and that the defendants received payment from the plaintiffs to perform such home improvements to their home, but that the defendants failed to timely complete the repairs causing financial loss to plaintiffs’ business, which was operated out of their home.
Plaintiffs appeared at the trial and hearing in damages, with only plaintiff Lance testifying. Defendant Steven appeared and participated at a minimal level, and neither defendant Maria nor defendant Maria as representative for Defendant Ice Guys participated in either the trial or the hearing in damages.
DISCUSSION- TRIAL ON THE MERITS
The burden of proof on the plaintiffs in a civil case such as this one, unless otherwise required, is by a fair preponderance of the evidence. "[I]n an ordinary civil action the party upon whom rests the burden of proof as to a fact or issue has sustained that burden if the evidence, considered fairly, induces in the trier’s mind a reasonable belief that it is more probable than otherwise that the fact or issue is true." Hennessey v. Hennessey, 145 Conn. 211, 214, 140 A.2d 473 (1958); Cruz v. Drezek, 175 Conn. 230, 235-36, 397 A.2d 1335 (1978).
Plaintiffs’ eleven-count complaint alleges the following causes of action: count one- breach of contract; count two- unjust enrichment; count three- negligence; count four- breach of implied warranty; count five- fraudulent inducement; count six- fraudulent and intentional misrepresentation; count seven- per se violations of CUTPA; count eight- violations of General Statutes § 52-564 for statutory theft pursuant to General Statutes § 53a-119(2) and § 53a-119(3); count nine- piercing the corporate veil; count ten- intentional interference with business expectancy; and count eleven- negligent infliction of emotional distress.
On April 24, 2018, a default entered against defendants Maria Wash. and The Ice Guys, and the court ordered a hearing in damages as to these two defendants on September 25, 2018, and scheduled the hearing in damages to take place at the trial. On April 25, 2019, the Court held a simultaneous trial on the merits against defendant Steven, and a hearing in damages against defaulted defendants Maria Walsh and The Ice Guys. Plaintiff Lance testified credibly to the facts and circumstances surrounding this case, and was subjected to limited cross examination by defendant Steven. Defendant Steven chose not to present any evidence, provided minimal personal testimony, and appeared to show little interest in the trial or hearing in damages. Defendants Maria Walsh and The Ice Guys did not present any evidence either at the trial or in the hearing in damages portion of the matter.
After review of live witness testimony and submitted exhibits, the court finds the following proven facts per count, which will be examined individually. As to count one, sounding in breach of contract, the court is required to find "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." Chiulli v. Zola, 97 Conn.App. 699, 706-07, 905 A.2d 1236 (2006); Seligson v. Brower, 109 Conn.App. 749, 753, 952 A.2d 1274 (2008). The contract between the parties, introduced as Plaintiff’s Exhibit A, outlined what the parties agreed. The defendant Steven was to finish part of downstairs basement of the plaintiffs’ home at 8 Freedom Circle, Southbury including framing, lighting, installation of outlets, painting, sheetrock and heating and install tile on the basement floor, for a contract price of $16,000. Plaintiff Lance testified that he paid the defendant Steven a deposit of $8,000 and a few weeks later paid another $4,000 toward the contract price. The contract states that "All work is to be completed in a substantial workmanlike manner according to specifications submitted, per standard practices." Plaintiff Lance testified that, to his knowledge, no building permit had ever been applied for by defendant Steven, the work performed on plaintiffs’ home were not done in a workmanlike manner, and defendant failed to complete the floor tiling, and the tile that was installed was mislaid and needed to be corrected. In addition, uncontroverted testimony by plaintiff Lance established that defendant Steven failed to complete floor trim, failed to paint the area, failed to install ceiling light and electrical fixtures, failed to install a thermostat for a third heat zone, failed to install doors, failed to properly install the basement heating system, and used a clothes dryer vent for the heating system instead of a proper heating duct, causing a potential fire hazard. Further, the plaintiff Lance testified that, in order to get a permit for the work that needed to be redone and completed by another licensed professional contractor, the sheet-rocking work done by defendant Steven had to be opened so that the enclosed work installed by defendant Steven could be properly inspected by the town building official. Additionally, defendant Steven was aware, based on discussions with plaintiff Lance that the work on the home needed to be completed by the third week of January 2018, and if it wasn’t completed, the plaintiffs would suffer substantial financial business losses for their home-based business. As the un-contradicted testimony and exhibits revealed, defendant Steven was acutely aware of the timeline, and continuously represented to the plaintiffs that it would be met. Plaintiff Lance further testified that defendant Steven knew how important the timeline was to their business, which is run out of the home. Plaintiff Lance testified that although the work was to be completed by the third week of January according to his discussions with defendant Steven, due to the defendant Steven’s actions, it was not completed until the beginning of April 2018, which required the plaintiffs to hire another contractor at the cost of $10,321.12 for work necessary to correct defective work and complete construction left unfinished by defendant Steven. In addition, plaintiff Lance testified that the plaintiffs spent $2,689.88 for materials purchased by plaintiffs for use in the home, which materials were installed improperly and required removal rendering the materials of no value. Plaintiff Lance claims conservative business losses of $23,000, for which plaintiff Lance submitted financial statements for the two consecutive years of 2017 and 2018, the year in question, which indicated that during the construction period year sales and net income was substantially less during the construction period. Plaintiff Lance testified that a relatively conservative loss of e-commerce sales during the relevant time period of first quarter 2018 was $23,000. This snapshot in time was compared against e-commerce sales for the first quarter of 2019 when sales were $27,329. The court is satisfied that the plaintiffs have proven the above claimed damages for breach of contract by a fair preponderance of the evidence and are entitled to damages.
As to count two, sounding in unjust enrichment, the court must find that "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 ... 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 benefitted, (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 ... [T]he determinations of whether a particular failure to pay was unjust and the defendant[s] [were] benefitted are essentially factual findings for the trial court." (Internal quotation marks omitted; external citations omitted.) Jo-ann Stores v. Property Operating Co., 91 Conn.App. 179, 194, 880 A.2d 945 (2005), citing Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 282-83, 649 A.2d 518 (1994). Here, the evidence shows that defendant Steven provided little to no value for the two payments that he received, based on the facts as outlined for the breach of contract claim above, and was, therefore, enriched by the plaintiff’s payment of Twelve Thousand Dollars ($12,000), which payment was to the plaintiffs’ detriment, and the plaintiffs have proven the above claimed damages for unjust enrichment by a fair preponderance of the evidence, and are entitled to damages.
As to count three, sounding in negligence, the court must find that "The essential elements of a cause of action in negligence are well established: duty; breach of that duty; causation; and actual injury." (Internal quotation marks omitted.) Jagger v. Mohawk Mountain Ski Area, Inc., 269 Conn. 672, 687 n.13, 849 A.2d 813 (2004). Application of the law on negligence to the facts as outlined for the breach of contract claim found above, the court determines that the work provided by defendant Steven was faulty, defective, and not of workmanlike quality, that plaintiff Lance complained repeatedly to defendant Steven about the work, but defendant Steven did not address plaintiffs’ concerns, and that plaintiffs suffered damages as a result of his negligence. The court is satisfied that the plaintiff Lance and plaintiff Joan have proven the above claimed damages for negligence by a fair preponderance of the evidence and are entitled to damages.
As to count four for breach of implied warranty, the court finds the legal requirement that "It is an implied condition of every service contract that the service will be performed in a workmanlike manner ... A breach of this implied condition would be a breach of contract." Ferrigno v. Pep Boys-Manny Joe and Jack of Delaware, Inc., 47 Conn.Supp. 580, 582 (2003). Application of the law on breach of implied contract to the facts as found above for the breach of contract claim above dictates that the court finds that defendant Steven breached the implied warranty that the work would be performed in a workmanlike manner. The court is satisfied that the plaintiff Lance and plaintiff Joan have proven the above claimed damages for implied breach of warranty by a fair preponderance of the evidence and are entitled to damages.
As to count five for fraudulent inducement and intentional misrepresentation, the court finds that the essential elements of an action for fraudulent inducement and intentional misrepresentation, or as more simply known in legal terms as fraud, are that: "(1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury ... Under a fraud claim of this type, the party to whom the false representation was made claims to have relied on that representation and to have suffered harm as a result of the reliance." (Citation omitted; internal quotation marks omitted.) Sturm v. Harb Development, LLC, 298 Conn. 124, supra, (2010) citing Suffield Development Associates Ltd. Partnership v. National Loan Investors, L.P., 260 Conn. 766, 777-78, 802 A.2d 44 (2002). "In contrast to a negligent representation, [a] fraudulent representation ... is one that is knowingly untrue, or made without belief in its truth, or recklessly made and for the purpose of inducing action upon it." (Internal quotation marks omitted.) Id., citing Kramer v. Petisi, 285 Conn. 674, 684 n. 9, 940 A.2d 800 (2008). "This is so because fraudulent misrepresentation is an intentional tort." Id., at 684, 940 A.2d 800. Based on plaintiff Lance’s testimony, the court finds that the defendant Steven intentionally made false representations to plaintiff Lance about his skill-level, ability and the timing of the delivery of the finished product, in order to induce plaintiffs into hiring him to perform the home repairs sought. Plaintiffs relied upon defendant Steven’s false statements to their detriment. Plaintiff Lance testified, and the text messages between the parties were submitted into evidence, which illuminate the level of deception engaged in by defendant Steven. Defendant Steven repeatedly stated that he had "a full crew" to deliver the job at the required completion date. Plaintiff Lance testified that only one employee of defendant Steven, Colby, did any work at their home. The court finds that plaintiffs have proven their claim of fraudulent inducement and intentional misrepresentation by a fair preponderance of the evidence, and are entitled to damages.
As to count six, for per se violation(s) of the Connecticut Unfair Trade Practices Act (CUTPA), plaintiffs allege numerous violations of the Connecticut Home Improvement Act § 20-418 et seq., which constitute per se violations of the Connecticut Unfair Trade Practices Act § 42-110b ("CUTPA"). General Statutes § 20-427(c) states that any violation of the Connecticut Home Improvement Act is a per se violation of CUTPA. See, e.g., Woronecki v. Trappe, 228 Conn. 574, 579, 637 A.2d 783 (1994). Once a violation of the act has been established, however, our cases make clear that the homeowners still must prove that they have suffered an injury or actual loss in order to recover damages under CUTPA. Scrivani v. Vallombroso, 99 Conn.App. 645, 916 A.2d 827 (2007). Plaintiff Lance established that defendant Steven did not have a Home Improvement Contractor’s License, as required by the Connecticut Home Improvement Act. The court finds that the lack of a home improvement license is a per se violation of CUTPA and, based on the facts found in the breach of contract claim outlined above, the plaintiffs have suffered an actual loss as required under CUTPA. The court is satisfied that the plaintiffs have proven the claimed damages for breach of CUTPA by a fair preponderance of the evidence and are entitled to damages.
As to count seven for violations of General Statute § 52-564 for Statutory Theft, pursuant to Connecticut General Statutes § § 53a-119(2) and 53a-119(3), the court finds that the standard of proof in cases under this statute is by clear and convincing evidence. Stuart v. Stuart, 112 Conn.App. 160, 176, 962 A.2d 842 (2009). "The phrase clear, substantial and convincing evidence fairly characterizes that degree of belief that lies between the belief that is required to find the truth or existence of the issue of fact in an ordinary civil action and the belief that is required to find guilt in a criminal prosecution. In cases such as this which require such a proof, the burden of persuasion is sustained if the evidence induces in the mind of the trier a reasonable belief that the facts asserted are highly probably true, that the probability that they are true or exist is substantially greater than the probability that they are false or do not exist. This is the quality of the evidence required in cases of this type." (Citations omitted; internal quotations marks omitted.) Lopinto v. Haines, 185 Conn. 527, 535, 441 A.2d 151 (1981). Plaintiff Lance testified that defendant Steven never attempted to complete the agreed upon scope of work despite repeated requests to do so as agreed. Defendant Steven did not attempt to repay all or part of the monies given to him over the pendency of this matter, and has made no repayment to date, therefore, the court can find that he acted to permanently deprive the plaintiffs of their money. The court is satisfied that the plaintiffs have proven the above claimed damages for statutory theft by clear and convincing evidence, and are entitled to damages.
As to count nine, for the plaintiff to be allowed to pierce the corporate veil, or in this case a doing business as (d/b/a), the court must find, and does find, that the evidence produced at trial, as shown by plaintiff Lance’s testimony, reveals that defendant Steven represented himself to be the entity of Ice Guys Refrigeration, by both driving a van with indicia that read "Ice Guys" on it, and also utilized, and communicated to the plaintiff Lance by an email address of iceguys1@yahoo.com. Ice Guys Refrigeration is alter egos of defendant Steven, and such truck and e-mail usage serve no legitimate purpose but to mislead, and whose name is used primarily as an intermediary to perpetrate a fraud on the plaintiffs by defendant Steven. The court is satisfied that the plaintiffs have proven the above claim to be allowed to "pierce the corporate veil," i.e., d/b/a against defendant Ice Guys by a fair preponderance of the evidence, and is entitled to damages.
As to count ten for intentional interference with business expectations, the court finds that for a plaintiff to successfully prosecute such an action, a plaintiff must prove that the defendant’s conduct was in fact tortious. This element may be satisfied by proof that "the defendant was guilty of fraud, misrepresentation, intimidation or molestation ... or that the defendant acted maliciously ... [A]n action for intentional interference with business relations ... requires the plaintiff to plead and prove at least some improper motive or improper means." (Citations omitted; internal quotation marks omitted.) Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525, 535-36, 546 A.2d 216 (1988); see Solomon v. Aberman, 196 Conn. 359, 364, 493 A.2d 193 (1985); Blake v. Levy, 191 Conn. 257, 260, 464 A.2d 52 (1983). Plaintiff Lance testified that he made defendant Steven know how important the timeline was to the plaintiffs, and their home-based business which is run out of their home. Plaintiff Lance testified that the work needed to be completed by the third week of January 2018, and due to the sole action or inaction of defendant Steven, it was not completed until the beginning of April of 2018 by another contractor plaintiffs hired. The claim of conservative business losses by plaintiff Lance is $23,000. The court is satisfied that the plaintiffs have proven the above claim for intentional interference with business expectations by a fair preponderance of the evidence, have suffered a substantial loss of business, and are entitled to damages.
As to count eleven for intentional infliction of emotional distress, the court finds that the plaintiffs have not briefed the claim. Since no claim for damages has been presented to the court, the court will consider count eleven abandoned, and proceed no further with this count.
The plaintiffs have proven to the satisfaction of this court, the claims in counts, one, two, three, four, five, six, eight, nine and ten by a fair preponderance of the evidence, and have proven to the satisfaction of this court, count seven, by clearing and convincing evidence. The court finds that the plaintiffs, as against the defendant Steven, are entitled to the following actual damages. First, repayment in the amount of $12,000 for contract payments made to defendant Steven; payment in the amount of $10,321.12 for work necessary to correct defective work and complete construction; payment in the amount of $2,689.88 for materials purchased by plaintiffs for use in the home which were installed improperly and required removal rendering the materials of no value; and payment to the plaintiffs in the amount of $23,000 for lost business income. In addition to the actual damages delineated above, the plaintiffs are entitled to recover punitive damages for CUTPA violations in the amount of $24,000; and treble damages as payment to plaintiffs for statutory theft in the amount of $36,000 for a total due to plaintiffs in the amount of $108,011. If not paid within thirty days after the expiration of the appeal period in this matter, statutory interest shall accrue.
DISCUSSION- HEARING IN DAMAGES
Plaintiff Lance’s and plaintiff Joan’s allegations against defendants Maria Walsh and defendant Ice Guys (Maria Walsh d/b/a Ice Guys Refrigeration) have been established conclusively by entry of the default in April 2018. [Doc. No. 101.05]. "The entry of a default constitutes an admission by the defendant of the truth of the facts alleged in the complaint." Kawasaki Kisen Kaisha, Ltd. v. Indomar, Ltd., 173 Conn. 269, 272, 377 A.2d 316 (1977); Went v. Schmidt, 117 Conn. 257, 258, 167 A. 721 (1933).
As to defendant Maria, while the court finds that she was an unwitting accomplice with defendant Steven, she presented no evidence to indicate that she in any way attempted to have defendant Steven either complete the project on time and on budget, nor did she in any way attempt to persuade him to return any of the payments plaintiffs made to defendant Steven when he failed to complete the project. The court further finds that defendant Maria either voluntarily allowed defendant Steven to use her d/b/a known as defendant Ice Guys’ e-mail account and vehicle, thereby misleading the plaintiffs to believe that defendant Ice Guys was involved in the work to be performed on the home; or she failed to take the necessary precautions to ensure that defendant Steven was not using her defendant Ice Guys d/b/a inappropriately to the detriment of the plaintiffs. Based on the foregoing, the court find in favor of the plaintiffs in count nine against defendants Maria and The Ice Guys, as defendant Maria either intentionally or negligently allowed defendant Steven to mislead plaintiffs to believe that defendant Ice Guys was involved in the work to be performed, therefore, the court orders defendants Maria, and Ice Guys to pay plaintiffs nominal damages in the amount of $1.00 each.