Opinion
No. CV04-0834274
September 28, 2006
MEMORANDUM OF DECISION
The plaintiffs in this action, Joseph and Marci Bordieri (Bordieris), homeowners, are seeking damages from the defendant, Samuel Nelson d/b/a Nelson Builders (Nelson) for breach of contract, slander of title and a violation of the Connecticut Unfair Trade Practices Act, General Statutes 42-110 et seq., arising out of an agreement for construction of a new home at 50 School Street in Avon, Connecticut.
Although the action was originally asserted against Nelson d/b/a Nelson Builders, defendant Nelson, while employing both a trade name and the name of a limited liability corporation during the course of his transaction with the plaintiffs, never did register a trade name or officially form any kind of business entity. Accordingly, the court will treat this as an action against Samuel Nelson in his individual capacity only.
At the beginning of trial on May 16, 2006, the defendant indicated to the court that he intended to file counterclaims by the end of the day. The court advised him it would not allow such an untimely filing of counterclaims after trial had commenced. As of December 2, 2004, the defendant was aware of the recourse of a counterclaim. ( Bordieri v. Nelson, Superior Court, judicial district of Hartford at Hartford, Docket No. CV040834275, (December 12, 2004, Berger, J.), T., 12. (With the agreement of the parties, the court took judicial notice of the file and Judge Berger's decision.)
Trial was held before the court on May 16 and May 18, 2006. At the conclusion of trial, plaintiffs and defendant requested time to submit briefs. The court, having considered the testimony, exhibits and arguments of the parties, finds the plaintiffs have failed to prove their claim in each count by a fair preponderance of the evidence, and therefore, finds for the defendant on all three counts.
Plaintiffs filed their brief on June 21, 2006; defendant filed his on July 28, 2006.
I FACTS
As of April 2003, the Bordieri and Nelson families had been neighbors for approximately five years. Nelson is an electrician by trade, although he had performed unspecified services as a "construction manager." Sometime in March of 2003, Joseph Bordieri ("Bordieri") showed Nelson a set of original drawings for a new home he was hoping to build on a lot adjacent to his existing home. This parcel, which Bordieri purchased for approximately $10,000.00, was located at 50 School Street, adjacent to 48 School Street, where Bordieri and his family then lived. Nelson lived at 47 School Street. Bordieri purchased the drawings for the proposed new house off the internet and showed them to a construction firm, Morgan Builders of Avon, whose principals advised Bordieri they would build the home shown on the plans for $224,000.00. Morgan Builders also provided Bordieri with a specifications sheet.
Bordieri and Nelson discussed the possibility of Nelson building the home instead. Although Nelson had never built a home as a general contractor, he had been hoping for an opportunity to do so. Nelson took the specifications provided by Morgan Builders and indicated that he could build the plaintiffs "much more house" than what had been priced out by Morgan Builders. After several weeks, during which Nelson "priced things out," a contract was drawn up at the Bordieris' kitchen table, with significant input from Joseph Bordieri and substantial reliance on the specifications originally submitted to him by Morgan Builders. After the contract was drafted, Bordieri wanted time to have his relative, a paralegal, review it. Subsequently, Bordieri indicated he wanted Nelson to take on the project as a certified Connecticut builder, not as a construction manager. An express contract was fully executed as of June 24, 2003 in which the parties agreed "Nelson Builders LLC" would build the Bordieris' house for $178,000.00.
When the contract was signed, Nelson had not yet formed any limited liability company, although the contract is between the Bordieris and "Nelson Builders LLC." Plaintiffs knew this, as Nelson told Bordieri he couldn't afford to file the necessary legal papers for the LLC until he had the money. Thus, the Bordieris knew when they signed the contract that Nelson was not an established general contractor or new homebuilder, knew there was no existing limited liability company, and never insured that any business entity was formed or any builder's license obtained before allowing Nelson to proceed. The Bordieris also knew that new home construction was not Nelson's principal trade of business; he was an electrician. There is an addendum to the contract, a "New Home Contractor Registration Notice," although the court, due to lack of evidence, cannot find that the defendant, at the time of the execution of the contract, was a registered new home contractor. The project commenced, and the first application for a building permit, in fact, shows the "builder" as Joseph Bordieri. The court concludes that the parties knew or should have known of the problematic use of the term "Nelson Builders LLC" in the contract, but acquiesced in its use, as they were anxious to get started and contemplated an eventual creation of such an entity. In sum, the contracting parties knew they had really contracted as three individuals: Joseph and Marci Bordieri and Samuel Nelson, and neither side has sought to invalidate the contract due to the "LLC" misnomer.
Although Nelson claims he obtained a new home builder's license, Defendant's exhibit DD is a license for home improvement, not new home construction.
Defendant's Exhibit KK, application for a building permit for the foundation only, issued on or about May 2, 2003, shows Bordieri as the applicant and the builder. The permit for the construction of the single-family home with one-car garage, Exhibit JJ, issued on or about August 1, 2003, shows "Nelson Builders" and "Samuel Nelson" as the applicants and "Nelson Builders LLC" as the builder.
Plaintiff's Exhibit 1, produced as evidence of a copy of the contract, is signed by Nelson and not signed by the Bordieris, as each party only signed the other's copy. Nevertheless, throughout the course of the trial, the plaintiffs and the defendant relied on Exhibit 1 as their evidence of the contract (and it was introduced without objection), so the court will consider Exhibit 1 to be the parties' contract.
The original contract states that "Nelson Builders, LLC . . . will facilitate the construction of a house" on a lot at 50 School Street in Avon in accordance with the "Plans and Specifications." Attached to the contract are three pages of specifications, although the lack of specificity with respect to many items, such as the gutters, garage insulation, interior trim, rear deck and stone in the driveway undoubtedly contributed to the problems now being litigated. The parties also contracted for additional items not originally in the specifications provided by Morgan Builders.
The contract required in ¶ 5 that changes and modifications resulting in the additional expenditure of labor or financial resources will be performed only after written approval from the plaintiffs. It further provided without reference to written approvals or change orders, that should the Bordieris' agreements with either JMM Wetland Consulting Services, LLC (to provide geological information about the parcel of land) or ALCA Survey Associates (to provide topographical survey information about the lot in order to lay out and confirm the location of the foundation walls) prove inaccurate or inconsistent, and negatively impact construction progress and/or cost, such additional expenses would be the Bordieris' sole responsibility. (¶ s 7, 8 and 9). (Subsequently, problems with the survey necessitated substantial revisions to the design of the home, as the garage, originally to be on the same level as the front door of the house, had to be built approximately four feet lower. However, there is no evidence any agreement was reached as to what costs the plaintiffs would absorb.) ¶ 11 of the contract required Nelson to deliver to the Bordieris, along with the certificate of occupancy, absolute waivers of mechanic's liens. In ¶ 13, Nelson warrants that the project "when completed" will be structurally sound and free from defects in material and workmanship. This warranty is for a period of one year from the date the Certificate of Occupancy (c.o.) is granted. At the bottom of the second page of the contract, a series of payments are set forth in a "Payment Disbursement — Schedule of Values," requiring at certain stages of construction a specific percentage of the contract price of $178,000.00 would be paid to Nelson. The final payment, 10% of the full contract amount, was to be paid upon the issuance of a c.o. Nelson began construction in the late spring or early summer of 2003. The new house came together, but not always as indicated in the specifications or plans, as the Bordieris would ask for additional items not originally in the contract or Bordieri and Nelson would decide one contractual item could be deleted in exchange for something new or different. At times, additional items and their cost would be memorialized with change orders; in other instances, items for which Nelson intended to charge extra or items he added for free were installed without the execution of any written change orders. As would be expected when novices contract without benefit of counsel, things proceeded haphazardly. This lack of formality, often in derogation of the contract, created unrealistic expectations and considerable confusion. It is impossible to ascertain what additional costs were to be borne by the plaintiffs and which ones were to be borne by the defendant. The Bordieris began to expect extras for free, while Nelson assumed that his performance of some of the extra work without charging would create sufficient good will with the Bordieris that he could expect their cooperation in paying him for other additions or changes subsequent to the work being performed, even in the absence of written change orders.
For example, a request to put two dormers in the roof of the house was the subject of a change order. Nelson installed kitchen cabinets "free of charge" when the cabinet company demanded additional funds above what the Bordieris had spent on purchasing cabinets to install them. (Normally, custom cabinets would be installed by the manufacturer.) Nelson also wired the whole house for computer use, including installation of a central port with a server in the kitchen, and did not charge the Bordieris for this. Other items Nelson added without additional charge included soffit lights in the front of the house, the installation of smooth, rather than popcorn ceilings, an extra header for framing in the attic to allow for the later installation of a staircase, the wiring of the sewer system and the installation of a generator transfer switch. Nelson estimates that the cost of the extra work for which he did not charge was in excess of $5,000.00. There were also undocumented "trade offs." When a closet could not be installed in the front entry due to a building code restriction, Nelson redesigned framing in the master bedroom to accommodate a larger tower and considered this extra work a trade off for not installing the entryway closet.
Exhibit T is the only change order in evidence that reflects an actual cost differential. Exhibit B, another change order, merely contains an acknowledgment that a different type of window was the equivalent of what was contemplated in the contract. Exhibit 28, referencing the garage insulation, shows no amounts and was never signed by the Bordieris.
In addition, Bordieri agreed to perform certain tasks himself or hire other contractors to address them. In the contract specifications, the Bordieris assumed responsibility for the installation of the sewer, the well, the finished interior paint, the purchase of the lighting fixtures, the chimney/fireplace installation and the landscaping. They later assumed responsibility for the laying of tile in the master bedroom shower area, the building of the rear deck stairs and the installation of a set of stairs from the bonus room to the attic. Many of the problems that developed would have been avoided if every deletion or addition of an item had been memorialized in writing as the contract required.
Ultimately, resentment developed between the parties, as misunderstandings over what was supposed to be installed, or additional requests for items not originally contemplated, mounted. There were disputes over the width of the base moldings and whether screens were to be installed in the windows. Which party would be responsible for additional costs incurred as a result of the survey's inaccuracy was never decided. According to Nelson, the "straw that broke the camel's back" was a dispute over the type of door hinges. The doors came with gold-colored hinges already installed, and they remained on the building site for several weeks before Nelson installed them. The Bordieris were supposed to pick out the door knob hardware, and they chose nickel door levers after the doors with gold hinges already had been hung. Bordieri told Nelson he wanted the door hinges changed to match the brushed nickel of the levers. Nelson said that would cost extra, since it would take two or three days to take off the doors and replace the hinges and reinstall the doors. Bordieri was unhappy. Without Nelson's knowledge, Bordieri went to the builder supply store, ordered matching silver hinges and charged them to Nelson's account.
Nelson refused to remove the doors and replace the hinges at no charge, a position the court finds justifiable.
After the feud over the door hinges, another instance of the Bordieris demanding items not specified, Nelson was less trusting and resolved only to do as much work as was necessary for the Bordieris to obtain a certificate of occupancy. He refused to turn over the certificate of occupancy to Bordieri until Bordieri signed a cost statement showing Nelson's proposed balances and allowances as of January 23, 2004. (Exhibit 2.) Nelson wanted Bordieri to acknowledge what amount was still due Nelson. The statement, which Bordieri stated he signed "under duress" because he had to move in that weekend due to planned furniture deliveries, itemized extras and allowances and indicated that the Bordieris owed Nelson $10,902.27. Bordieri did consult with an attorney before signing this statement, which was amended in accordance with the attorney's suggestions. Although Bordieri may have agreed a balance was due Nelson in the amount of $10,902.27 and agreed to pay it, there is no evidence that Marci Bordieri, a signatory to the original contract, ever signed this proposed modification. Accordingly, although the court does not find Bordieri signed this subsequent statement under duress, the court declines to consider this statement as a modification to the original contract. However, it is evidence of an approximate amount due Nelson at that time.
The contract price was $178,000.00. The Bordieris had paid $167,700.00 as of December 2003. (Exhibit 2.)
Regardless, almost immediately thereafter, on January 26, 2004, once the Bordieris had received the certificate of occupancy, they sent Nelson a letter containing a list of items they maintained Nelson had to complete before any further payment under the contract was made. This included installing door kick plates, which were not specified in the contract, adjusting thresholds on all exterior doors, clearing trash left from construction and removal of wooden plates from the yard, installation of shutters and gutters, delivery and spreading of stone for the driveway, fixing the back hall door water leak, fixing the basement foundation water leak, replacing a warped front door, installing stairs on the back deck, fixing a leak in the Jacuzzi tub and insuring an air condition unit was up and running by April 30, 2004. None of these items had affected the town's issuance of the C.O. What is curious about this January 26, 2004 letter is that it included items that Bordieri had agreed to accept allowances, or credits for, from Nelson when he signed the January 23, 2004 cost statement, namely, the driveway stone and gutters, and demanded Nelson build the rear deck stairs Bordieri had agreed he would build himself. It is obvious to the court that the Bordieris never intended to pay Nelson any money in exchange for the work he performed to obtain a c.o. and that Joseph Bordieri did not sign the January 23, 2004 statement in a good faith effort to resolve the parties' differences.
A stalemate had developed. The Bordieris believed if they paid Nelson a final installment, Nelson would just walk away and not finish the job. Nelson believed that if he went ahead and did the work, the Bordieris would refuse to pay what he believed he was owed and demand more extra items that were not in the contract. The haphazard way in which the parties had modified the specifications and contractual obligations without benefit of ongoing change orders made it impossible to calculate a final installment upon which they all could agree. Unfortunately, without that final installment, Nelson possibly was prevented from settling outstanding issues, if any, with the subcontractors.
After the Bordieris moved into the home, this lawsuit developed allegedly due to (1) Nelson's refusal to finish any work in the home until he was paid $10,902.27; (2) Nelson's refusal to pay subcontractors; and (2) Nelson's placing of mechanic's liens on the property at 50 School Street on two separate occasions, in February and May 2004, necessitating the plaintiffs' filing several applications to discharge. An application for a prejudgment remedy was filed by the plaintiffs on May 18, 2004 seeking to secure the sum of $25,000.00.
After a hearing, the court (Berger, J.) allowed a prejudgment remedy in the amount of $4,703.00.
1. Count 1 — Breach of Contract
In their complaint, the Bordieris allege Nelson breached their written contract in a number of ways by refusing to complete a number of items, pay certain subcontractors, and honor his one-year warranty. The Bordieris have failed to meet their burden of proving an enforceable breach of the contract on Nelson's part by a fair preponderance of the evidence. The court finds that the Bordieris, prior to the issuance of the c.o., were unwilling to perform their obligation under the contract to pay Nelson his final installment, and therefore, they are not entitled to enforce its provisions. The court also finds that Nelson, simultaneously, was unwilling to perform his obligation to fully complete the house, although he did substantially complete it, as the plaintiffs were able to occupy it. "The law excuses a contracting party from performing his promise for a variety of reasons — infancy, insanity, impossibility caused in certain ways; but however blameless in law or fact a party to a contract may be in failing to perform his promise, if he does fail he should not have what is promised in exchange for his performance." 1 Restatement, Contract § 274, commentary, p. 402 (1932)[fn. 13].
There was insufficient evidence for the court to conclude that Nelson committed a breach in not obtaining "absolute waivers of mechanic's liens," as required by the original contract. Plaintiffs neither alleged nor proved this. Nelson testified that he did provide at least one of them, and that the other subcontractors who demanded money of the Bordieris were really not owed anything, having been paid or fired. The court also notes that the bank inspected and allowed the closing to go forward; presumably, this may not have happened without such waivers.
Section 274 of the Restatement of Contracts (1932) provides, "(1) In promises for an agreed exchange, any material failure of performance by one party not justified by the conduct of the other discharges the latter's duty to give the agreed exchange even though his promise is not in terms conditional."
After the dispute over the door hinges, the parties stopped communicating. Nelson was unwilling to do any more work beyond the minimum required to obtain the c.o. because he believed the Bordieris were either going to demand more extras and/or not pay him. The Bordieris believed that Nelson was going to take their money and walk away from the job. Not only did they refuse to pay him until he completed all work, they demanded additional work for items not in the contract.
In sum, both the plaintiffs and the defendant were mutually prospectively unwilling to perform their obligations under the contract or honor its terms. Therefore, neither party is entitled to enforce its provisions. In instances where both parties are at fault, neither may recover. "Whether the doctrine is described as failure of consideration, failure to satisfy a condition precedent, or mutual breach of contract . . . in proper circumstances, a court may refuse to allow recovery . . . because of mutual fault, which in contract terms might be more properly described as mutual default." (Citations omitted.) Westinghouse Electrical Corp. v. Garrett Corp., 601 F.2d 155, 158 (4th Cir. 1979); Efthimiou v. Smith, 268 Conn. 487, 495-97, 846 A.2d 216 (2004).
Accordingly, the Bordieris cannot maintain an action to enforce a contract they also breached, and the court finds for the defendant on the first count.
2. Count 2 — Slander of Title
In their second count, the Bordieris allege that Nelson placed two mechanic's liens on the 50 School Street property, one on February 17, 2004 and the other on or about May 4, 2004. Plaintiffs claim the liens were improper and were done "to harass and embarrass them" and that they suffered damages in having to retain counsel to discharge these liens.
There also is an allegation in paragraph 5 of the second count that another subcontractor filed a claim of lien on the Avon land records, but no proof of this was presented.
The defendant acknowledges that the first lien was technically incorrect in that it was filed in the name of his nonexistent limited liability company; he maintains that the second lien was justifiably filed when plaintiffs did not pay him his final recalculated installment of $10,902.27, as reflected on the cost statement he and Bordieri signed on January 23, 2004. However, he does concede that he never registered the trade name of "Nelson Builders" with the town of Avon.
"A cause of action for slander of title consists of the . . . publication of a false statement derogatory to the plaintiff's title, with malice, causing special damages as a result of diminished value of the plaintiff's property in the eyes of third parties. The publication must be false, and the plaintiff must have an interest in the property slandered. Pecuniary damages must be shown in order to prevail on such a claim." (Internal quotation marks omitted.) Elm St. Builders, Inc. v. Enterprise Park Condominium Assn., 63 Conn.App. 657, 669-70, 778 A.2d 237 (2001). Slander of title can occur when title of land is disparaged by a written instrument such as a lien. Wright, Connecticut Law of Torts, Sec. 167, p. 349.
There is no dispute that the Bordieris have an interest in 50 School Street as its owners. In their brief, they argue that on two occasions, Nelson filed a "false" statement in the form of two liens in the names of non-entities, Nelson Builders, LLC, and Samuel Nelson d/b/a Nelson Builders, when Nelson knew he had never formed a limited liability corporation or filed a trade name certificate. The plaintiffs do not argue that the defendant's claim that the plaintiffs owed him money when he filed the liens was patently false.
Even if the defendant could not have enforced the contract due to either the mutual breach, the lack of the existence of the two above-mentioned entities, or the lack of a valid license or registration, he may have had a valid claim under a quasi contract theory. See D'Angelo Development Construction Co. v. Cordovano, 278 Conn. 237, 251, 897 A.2d 81, (2006) (holding that a new home construction contract with no illegal purpose that fails to comply with the registration, disclosure and contract language provisions of the New Home Construction Contractors Act, General Statutes § 20-417a et seq., may still be enforceable and the contractor's failure to comply with the act does not render a mechanic's lien invalid.) Compare Barrett Builders v. Miller, 215 Conn. 316, 325, 576 A.2d 455 (holding that noncompliance with the Home Improvement Act, General Statutes § 20-418 et seq. prohibits recovery even under a quasi contract theory). Of course, the defendant would have to have proven that he was still owed some compensation for work performed before the mutual breach.
The court finds that Nelson, in filing the mechanic's liens, did not act with malice, e.g. solely to harass or embarrass the plaintiffs. Rather, the court finds Nelson acted pursuant to a good faith belief that he was owed money pursuant to the parties' contractual agreement, especially in light of the statement Bordieri signed on January 23, 2004, acknowledging he owed Nelson $10,902.27. In filing his mechanic's liens, Nelson was acting in a manner he believed permissible in the face of uncertain rights. Old Quarry Association v. Hickey, 659 F.Sup. 1064, 1074 (D.Conn. 1986).
In addition, the Bordieris' cause of action for slander of title fails because they have not proved the requisite harm. Although they assert in their brief that the placing of the mechanic's liens would "cause a diminished value in the eyes of third parties," they have failed to prove that the existence of the liens for the short time they remained on the land records actually diminished the value of the property in the eyes of third parties. They argue that the mechanic's liens clouded their title and that proof of a clouded title is damages per se. This is not true. "The plaintiffs must present evidence of how the clouded title resulted in some pecuniary loss." Gilbert v. Beaver Dam Ass'n. Of Stratford, Inc., 85 Conn.App. 663, 673, 858 A.2d 860 (2004).
The Bordieris, in their complaint, claim their only damages for slander of title are the amount of attorneys fees they expended to have the liens discharged. (Complaint, ¶ 8.) However, they cite no authority for an award of attorneys fees in a common-law claim for slander of title without proof of a diminution in the value of their property. Moreover, their proof of the reasonableness of the attorneys fees they claim were necessarily expended to discharge the liens was inadequate. Even if the Bordieris were entitled to an award of fees, the three-day hearing they claim it took their attorney to discharge the liens is an exaggerated claim in light of the fact that Nelson withdrew the first lien, and the fact that Judge Berger combined a hearing for the plaintiffs' application for a prejudgment remedy with the hearing on their application for discharge of the second. At the end of the consolidated hearing, Judge Berger discharged the liens because he ascertained that Nelson had failed to properly serve the Bordieris with notice of them. In discharging the lien, Judge Berger did not make any determination as to its substantive validity. Apart from the unsubstantiated fee to discharge the liens, the Bordieris suffered no real damages as a result of the filings. They were not planning to sell the home, nor is there any evidence they were denied a mortgage or other benefits as a result of the liens' existence.
There is a provision in General Statutes § 49-51 of the mechanic's lien statute for an award of attorneys fees when an invalid lien is discharged, but the Bordieris have not availed themselves of the benefits of this statute and the type of proceeding contemplated therein is not before the court.
Bordieri v. Nelson, Docket No. CV 04-0834275, supra, T., 12/2/04, 8-12.
The plaintiffs have failed to prove their claim of slander of title by a fair preponderance of the evidence. The court finds for the defendant on the second count.
3. The Violation of CUTPA Claim
In the third count, the Bordieris assert that their neighbor, Nelson, violated the Connecticut Unfair Trade Practices Act, General Statutes § 42-110b(a). They allege in their complaint that Nelson's failure to pay the subcontractors, refusal to complete the contract or fix certain items not done correctly, placement of two mechanic's liens on their property, fraudulent representation of the existence of Nelson Builders LLC and/or Nelson Builders and violation of the "Home Improvement Contractors Act" constitute unfair trade practices and that they have sustained an ascertainable loss.
General Statutes § 42-110b(a) provides that "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." "Trade" and "commerce" are defined as "advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property, tangible or intangible, real personal or mixed, and any other article, commodity, or thing of value in this state." General Statutes § 42-110a(4). Our Supreme Court has adopted the criteria set out by the Federal Trade Commission in the "cigarette rule" to determine whether there has been a violation of CUTPA. Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 591, 657 A.2d 212 (1995). The criteria for a CUTPA violation are: (1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive or unscrupulous; and (3) whether it causes substantial injury to consumers (competitors or other businessman). All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three. A violation of CUTPA may be shown by proof of an actual deceptive practice or a practice amounting to a violation of public policy. Associated Investment Co. Ltd. Partnership v. Williams Associates IV, 230 Conn. 148, 156 645 A.2d 505 (1994). CUTPA establishes "a standard of conduct more flexible than traditional common law claims" and "the expansive language of CUTPA prohibits unfair or deceptive trade practices without requiring proof of intent to deceive, to defraud or to mislead." Id., 158.
A CUTPA claim relevant only to a single act or transaction is carefully scrutinized. Although a single transaction may be the proper subject of a CUTPA count, the essence of the act, despite its broad definition of "trade" and "commerce," is its effort to provide a remedy for the unfair practices purpose of an existing or continuing enterprise, not misconduct that might occur in the course of a one-time transaction by a private individual. See Crescenzo v. Camarota, Superior Court, judicial district of New Haven at New Haven, Docket No. CV97-0396433S, (June 9, 1997, Silbert, J.) ( 19 Conn. L. Rptr. 611). "The issue is not whether the litigant is required to allege more than a single transaction but whether CUTPA applies to a single private transaction by a person not employed in the business of making such a transaction." McCarthy v. Fingelly, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 90-268839, (May 28, 1991, Katz, J.) (4 Conn. L. Rptr 177). The court has reservations about whether or not Nelson was engaging in the building trade. He was not an experienced builder; in fact, he was not a builder at all when he and the Bordieris agreed he would make the construction of their home his first experimental foray into the general contracting business. When the parties entered into this contract, Nelson was not engaged in home construction as his primary trade or business; he was an electrician. The Bordieris knew this, but decided to ask their friend to help them build the house so he could get some experience and they could save a significant amount of money, as Nelson's estimate was considerably less than a professional building company in Avon had priced to the plaintiffs. Initially, Bordieri was willing to serve as his own general contractor and contract with Nelson to manage the construction. However, after consulting with a relative with some legal knowledge, (not an attorney), he asked Nelson to register as a new home contractor. Bordieri and Nelson drafted the contract together and the details were taken from plans off the internet and specifications that had been provided to the plaintiffs from Morgan Builders. The parties signed the contract despite the fact that they all knew Nelson had yet to create any company entity with a valid license or permit to build new homes. The first permit was taken out showing the plaintiff as the builder. Significant portions of the work were to be done by other relatives or friends of the plaintiff and the plaintiff himself. In sum, the transaction was hardly a true consumer transaction where one side with greater experience could seek to take advantage of the other. However, for purposes of this decision, the court will accept the premise that this could be considered an isolated transaction which occurred in a "business context." Begelfer v. Najarion, 409 N.E.2d 167 (Mass. 1980).
The first allegation upon which the Bordieris rely in support of their CUTPA claim is that Nelson fraudulently placed two invalid mechanic's liens on their property. Since the court has found the mechanic's liens, although technically deficient, were neither false nor malicious in its discussion of the slander of title claim, the court finds that the Bordieris have failed to prove that Nelson's actions in filing the mechanic's liens violated CUTPA. The parties had reached a point where their business relationship and friendship was totally broken down. The contract was mutually breached. While Nelson may not have been technically proficient in proceeding on his own behalf, he was not engaging in immoral or unscrupulous behavior when he filed what he reasonably had cause to believe were valid mechanic's liens. Nelson indicated he would complete the work when he got paid the amount of the final payment he demanded. Payment never came, prompting him to file two mechanic's liens. He failed to proceed properly by not having a marshal serve the plaintiffs with notice of the liens, and for that reason, the judge discharged them. As the court further indicated in its discussion of the slander of title claim, apart from an unsubstantiated claim for attorneys fees and costs, the Bordieris suffered no real damages as a result of the filing of the liens. They were not planning to sell the home, nor is there any evidence they were denied a mortgage or other benefits as a result of the liens' existence.
In light of the fact that the defendant did not act unfairly or deceptively in attempting to secure his final payment, the court finds the filing of the mechanic's liens did not constitute a CUTPA violation.
The next allegation is that Nelson violated the Home Improvement Contractors Act, which is inapplicable to this case since it involves new home construction. While the Bordieris sketchily address a claimed violation of the New Home Warranties Act, General Statutes § 47-118(a) et seq., in their brief, they never amended their complaint to allege such. "It is fundamental in our law that the right of a plaintiff to recover is limited to the allegations of his complaint." (Internal quotation marks omitted.) McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 490, 890 A.2d 140, cert. denied, 277 Conn. 928, 895 A.2d 798 (2006). "The purpose of the complaint is to limit the issues to be decided at the trial of a case and is calculated to prevent surprise." (Internal quotation marks omitted.) Id., 491. The court heard no evidence that would justify finding a breach of an express or implied warranty constituting "faulty materials," construction not "in accordance with sound engineering standards," unworkmanlike construction or a structure "unfit for habitation." See General Statutes § 47-118(a). In addition, the court has ruled that the parties mutually breached the contract well before the warranty period expired, which absolved the defendant of honoring any express or implied warranty obligations.
The assertion that Nelson failed to honor the contract and pay the subcontractors is without merit in light of the fact that the court has found the parties mutually breached the contract and as such, plaintiffs are not entitled to recover from the defendant for a breach. In addition, Nelson's breach does not meet the criteria for finding a CUTPA violation.
Finally, although the court finds Nelson's use of the names of nonexistent entities, namely "Nelson Builders, LLC" or "Samuel Nelson, d/b/a Nelson Builders" violated public policy, the court does not find that defendant's failure to inform the plaintiffs that no such entities were actually ever formed was sufficiently misleading to form the basis for a CUTPA claim. See Messler v. Barnes Group, Superior Court, judicial district of Hartford at Hartford, Docket No. 560004 (February 1, 1999, Teller, J.) ( 24 Conn. L. Rptr. 107).
The failure of the defendant to disclose his failure to actually form any of the two business entities violates public policy as set forth by statute. General Statutes § 35-1(a) requires that "No person . . . shall conduct or transact business in this state, under any assumed name, or under any designation, name or style, corporate or otherwise, other than the real name or names of the person or persons conducting or transacting such business, unless there has been filed, in the office of the Town Clerk in the town in which such business is to be conducted or transacted, a certificate stating the name under which such business is or is to be conducted or transacted and the full name and post office address of each person conducting or transacting such business . . . Failure to comply with the provisions of the subsection shall be deemed to be an unfair or deceptive trade practice under subsection (a) of Section 42-110b."
However, a violation of CUTPA does not allow for recovery unless the claimant can show he suffered an "ascertainable loss" of money or property as a result of the prohibited act. General Statutes § 42-110g(a); see generally Fink v. Golenbock, 238 Conn. 183, 212-13, 680 A.2d 1243 (1996). Recently, in Sawyer v. Brass, Superior Court, judicial district of Stamford at Stamford, Docket No. FST CV 05 5000213 (May 18, 2006, Lewis, J.) (41 Conn. L. Rptr 363), the court ruled that to recover on a CUTPA claim based on the operation of a business under a trade name without registering the trade name with the town clerk in which the business is located as required by § 35-1, a party must still prove an actual loss. To prevail in a CUTPA action, "A plaintiff must establish both that the defendant has engaged in a prohibitive act, and that, as a result of this act, the plaintiff suffered an injury. The language `as a result of' requires a showing that the prohibited act was the proximate cause of a harm to the plaintiff." (Internal citations omitted.) Abrahams v. Young Rubicam, Inc., 240 Conn. 300, 306, 692 A.2d 709 (1997).
Having found that the misrepresentation as to the existence of Nelson Buildersm, LLC and the failure to file the trade name of Nelson Builders with the town of Avon, by law, constitute a CUTPA violation, the court must ascertain whether or not the Bordieris suffered an ascertainable loss of money or property, and if so, any actual damages as a result of these omissions. The Bordieris have failed to specify or prove any ascertainable loss or any quantifiable damages proximately caused by Nelson's use of fictitious entities to do business. They were never misled as to the real identity or address of the person conducting business with them. There is no basis for finding that the defendant was attempting to conceal his identity and/or his assets from creditors. The court concludes the plaintiffs did not suffer any ascertainable loss as a result of the use of unsanctioned names for non-existent entities, and as such, they are not entitled to recover under CUTPA. The court finds against the plaintiffs and for the defendant on the third count.
Conclusion
Accordingly, judgment may enter in favor of the defendant, Samuel Nelson, on all three counts of the plaintiffs' complaint.