Opinion
No. FST CV 02 0189185 S
May 25, 2005
MEMORANDUM OF DECISION
Paul F. Forman, Stanley Wilker, Norma Wilker and Barbara Agre are the plaintiffs in two lawsuits brought against the defendant, Robert J. Walpuck, which were consolidated for trial. The proceedings consisted of five trial days in May and August 2004. The parties filed post-trial memoranda in March 2005.
In one action, designated as docket number CV 02 0189185, the plaintiffs seek treble monetary damages pursuant to Conn. Gen. Statutes § 52-560 for the defendant's alleged unauthorized cutting of the trees on the plaintiffs' land. (Tree Case.)
In the other, docket number CV 02 0189186, the plaintiffs claim a declaratory judgment terminating a certain written contract of sale of real estate between the parties, a release of the parties from their respective obligations under the contract, and a declaration that the property described in the contract is unencumbered by any obligation to the defendant. (Declaratory Judgment Case.)
Along with his answer in the Tree Case, the defendant filed a counterclaim alleging unjust enrichment in the first count and in a second count, that the plaintiffs are obligated under the terms of the real estate contract and an alleged oral agreement, to return "all sums expended by the defendant, Robert J. Walpuck, to said Robert J. Walpuck."
In the Declaratory Judgment Case, the defendant filed two special defenses and a counterclaim. The two special defenses plead, respectively, waiver and "lack of good faith cooperation by the plaintiffs under the contract." In this case, the defendant also filed a counterclaim in two counts against the plaintiffs alleging a breach of the real estate contract between the parties and unjust enrichment. He asks for specific performance of the contract, a decree vesting title to the land in the defendant, and an injunction restraining the plaintiffs from conveying, encumbering or in any manner disposing of the land, and money damages.
In the counterclaim itself, dated July 1, 2003 but not filed with the court until February 11, 2004, the defendant, Walpuck, is mistakenly referred to as plaintiff and the plaintiffs as the defendants. In the defendant's trial memoranda, new counsel properly referred to the parties by their correct designations.
The court finds the following facts. The plaintiffs, the owners of land in Weston, Connecticut entered into a written contract on September 15, 1998 to sell the property to the defendant. The property consists of two parcels of land designated in the contract of sale as Parcel "A" and Parcel "B" on Map No. 3395 on file in the Town Clerk's Office of the Town of Weston. On said Map, Parcel "A" is purported to be owned by the plaintiffs Stanley Wilker, Barbara Agre, and Norma Wilker. Parcel "B" is purported to be land of the plaintiff, Paul F. Forman. Taken together, the parcels comprise approximately eighteen (18) acres of land.
A portion of Parcel "A," seen as a "tail," or "panhandle," on Map 3395 and so referred to during trial, was determined not to be owned by the Wilker plaintiffs, was so agreed by them, and the defendant did not claim a title defect because of it.
The real estate contract between the parties called for the defendant to purchase Parcel "A" and Parcel "B" on the aforesaid Map 3395 for the purchase price of $700,000 "for the first four (4) lots established by division and/or approved subdivision . . ." and an additional $225,000 for each subsequent or additional lot as may be approved. The contract also required an option deposit in the amount of $7,000 from the defendant, which provided him 120 days to "undertake any and all tasks he deems necessary in order to assess whether it is feasible to develop said premises by division and/or subdivision." This 120-day period was designated in the contract as the "preliminary review phase." The deposit was non-refundable. The sellers were to remove the property from the market for sale, and were to entertain no offers for purchase.
Within said 120 day period, the defendant was to notify the plaintiffs whether he elected to withdraw from the contract or to pursue an application for a subdivision of the property, time being of the essence in either instance. If the buyer elected to pursue the subdivision, he was to pay the sellers an additional $63,000 deposit, to be credited to the purchase price at the closing of title. This was to begin the "application phase" of the contract during which the defendant was expected to "file any and all applications and permits with any and all land use boards, agencies or commissions of the Town of Weston in order to develop or further develop said property by subdivision as contemplated herein, and to pursue said applications and permits with all reasonable diligence . . ." The $63,000 was never paid to begin the "application phase." The contract required that title closing would occur "upon division or the final subdivision" for the first four lots during the application phase, and within 30 days after the expiration of any appeal period from any such approval. The written contract gave the defendant up to July 31, 1999 to obtain any and all approvals, with a closing no later than August 31, 1999. The contract further provided that the buyer would be solely responsible for any and all costs and expenses incurred by him in either the preliminary review phase or the application phase of the contract, said costs to include application and/or permit fees, surveys, tests, reports and "legal engineering" (sic) fees.
Curiously, the contract does not call for notice to be in writing.
Although he began almost immediately after the execution of the contract to remove trees and excavate in the land, the defendant was unable to determine within the first 120-day period whether it was feasible to develop the property into at least four lots. As a result the parties came to an oral agreement that the defendant would pay the plaintiffs the sum of $3,000 per month for him to continue to attempt subdivision approval. There was no re-execution of the written contract nor a new written agreement. Neither was there evidence of how long the extension was intended to be. There is evidence (plaintiffs' exhibit 8) that the plaintiffs believed that the extensions were to be for three-month periods consisting of non-refundable payments.
Without specific authorization from the plaintiffs, the defendant cut down 1,485 trees. He also dug test holes for septic systems, and constructed a temporary road for excavating equipment to access the proposed sites. The defendant claims this activity was necessary in order to determine whether four lots could be obtained. Unfortunately, the defendant did not obtain proper permits from the Department of Environmental Protection for activities in or near wetlands, zoning permits, or Conservation Commission approval. These failures haunted the defendant throughout the ensuing months, and caused delay in the Town's addressing his division or subdivision requests. It caused him to be issued continuing notices of violation and cease and desist orders. The defendant admits that throughout the "extension period," he pursued his attempts to gain four lots by "free-cut" division of the existing parcels, thus avoiding the subdivision process. The defendant caused to be prepared and filed in the Town Clerk's Office new maps of the property which showed different configurations than the two parcels shown on Map 3395 referred to in the contract of sale.
Apparently, if a parcel of land has not previously been divided, or had a different configuration, it may qualify for division into two lots without the filing of an application for an actual subdivision, i.e., the owner may receive a "free cut." In this case, if Parcel "A" and Parcel "B" qualified, each could be divided into two lots, producing four lots without "formal subdivision."
The defendant was never able to convince the Town of Weston and its officials that the property qualified for free cut division. Title searches and maps were provided, but it could not be shown where the interior dividing line between the two parcels was located. This caused the defendant to request the plaintiff to prepare and file a new map establishing a new boundary line between their land, which would clearly show that a division of the entire property into four lots could be had. The plaintiffs agreed to do so, but only simultaneously with the closing of title.
Throughout the "extension period," the defendant continued to pay the plaintiffs at the rate of $3,000 per month, and the plaintiffs continued to accept the checks. The plaintiffs never instructed the defendant to stop his efforts to seek permission to develop the property. However, at various times they pressed him and his counsel to set a closing date and to close. This period lasted for approximately three years, from January 13, 1999 to January 25, 2002, when the plaintiffs gave written notice to the defendant that he must close title by March 1, 2002. After that date, the plaintiffs refused to accept any further checks from the defendant.
The contract having been signed on or as of September 15, 1998, the original 120-day option period expired on January 13, 1999.
I. The Declaratory Judgment Case
In this case, the plaintiffs seek a declaratory judgment terminating the written real estate contract, a release of all parties from their respective obligations under the contract and a declaration that the property is unencumbered by any obligation to the defendant.
The court finds that the action is an appropriate one for a declaratory judgment; P.B. § 17-54; and that the action may be maintained because `There is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement between the parties." P.B. § 17-55(2).
The fate of the written real estate contract is determined by Conn. Gen. Statutes § 47-33(a). No action to enforce the agreement was commenced within one year after August 31, 1999, the date provided in the agreement for the performance of the contract, nor within 18 months of September 15, 1998, the date on which the agreement was executed. Neither was the interest of the defendant extended by re-execution of the written agreement or by execution of a new agreement as required by § 47-33a(b). Therefore, any interest of the defendant in the property expired by operation of the statute and without being properly extended. The oral agreement could not and did not extend the interest of the defendant in the subject property. Conn. Gen. Statues § 47-33a(b).
Conn. Gen. Statutes § 47-33a reads as follows: Action on agreement to sell real estate. (a) No interest in real property existing under an executory agreement for the sale of real property or for the sale of an interest in real property or under an option to purchase real property shall survive longer than one year after the date provided in the agreement for the performance of it or, if the date is not so provided, longer than eighteen months after the date on which the agreement was executed, unless the interest is extended as provided herein or unless action is commenced within the period to enforce the agreement and notice of lis pendens is filed as directed by Section 52-325.
(b) The interest may be extended only by reexecution of the written agreement or by execution of a new written agreement, provided the agreement, whether reexecuted or newly executed, shall be recorded as directed by Sections 47-10 and 47-17. The period provided by this section shall not otherwise be extended, whether because of death, disability or absence from the state or for any other reason. Upon the expiration of an interest the title to property affected by the interest shall not thereafter be considered unmarketable because of the expired interest.
(c) Nothing in this section shall be construed to limit or deny any legal or equitable rights a party may have under the agreement except the right to have the agreement specifically enforced.
The defendant's two special defenses do nothing to ameliorate the effect of Conn. Gen. Statutes § 47-33a. The unambiguous provisions of the statute make no exception for a waiver as claimed against the plaintiff in the defendant's first special defense, nor for a claim of "lack of good faith cooperation" by the plaintiffs in the defendant's second special defense. Re-execution of the written agreement or the execution of a new one is mandated by the statute. Furthermore, the survival of one's interest in the real property beyond the period provided in the statute "shall not otherwise be extended, whether because of death, disability, absence from the state or for any other reason." (Emphasis added.) Conn. Gen. Statutes § 47-33a(b).
With respect to the defendant's counterclaim, the first count asks for specific performance of the written agreement. The defendant alleges an extension of the written agreement by an oral contract for the payment of $3,000 per month to extend his option, that he spent substantial sums of money testing the subject property, that he is ready, willing and able to complete the terms of the agreement, and alleges other facts irrelevant to the issue of his entitlement to the property in this case. That issue is conclusively determined by § 47-33a(c), which excepts from any rights the defendant may have, the right to specific performance.
The court makes the factual finding that beyond the allegations in the defendant's counterclaim, the defendant was never, at any time, including at the time of trial, ready, willing and able to consummate the transaction.
Conn. Gen. Statutes § 47-33a(c) reads as follows: "Nothing in this section shall be construed to limit or deny any legal or equitable rights a party may have under the agreement except the right to have the agreement specifically enforced." (Emphasis added.)
The defendant's second count of his counterclaim sounds in unjust enrichment. The same section of the Statute, § 47-33a(c) which defeats the defendant's right of specific performance, also makes it clear that other legal or equitable rights he may have may be asserted. The court finds that the written real estate contract was contingent upon the defendant dividing or subdividing the subject parcels into four lots. The language of the contract, and the conduct of the parties make it clear that the defendant was not obligated to take title unless the property produced four building lots. Because this was not accomplished within the time periods established by the contract, the parties entered into another arrangement which allowed the defendant to continue his efforts toward subdivision. Unfortunately, as stated above, this arrangement was not in writing and the defendant was thus deprived of any right to title to the property. Whether the defendant's payment of $3,000 per month and the plaintiffs' acceptance of the same conferred any other rights upon the defendant is the question now for the court.
See footnote 8.
Initially, the court finds that any oral agreement between the parties contained no understanding as to the term of the agreement, nor was there any evidence to show that the $3,000 per month was to be applied to the purchase price if a closing were ever to occur, or was anything more than tantamount to a continuing non-refundable option to purchase. The court, in fact, finds that there was no meeting of the minds required for the formation of an express contract. Cheverie v. Ashcraft Gerel, 65 Conn.App. 425, 439, 783 A.2d 474 (2001). To find even an "implied contract," the court must supply an intent of the parties as to the length of time of the extension of the option. The court finds that the parties, if anything, intended an extension of a reasonable time within which the defendant was to obtain his approvals. (See Bartlett v. Raidart, 107 Conn. 691, 694, 695, 142 A. 398 (1928), for a discussion of implied contracts and quasi-contracts.) The defendant did not accomplish this in a reasonable time. He was dealing with the Town of Weston for some three years before the plaintiffs finally demanded closure. They had demanded closing dates several times during the period to no avail. The plaintiffs had not agreed that the defendant had an indefinite period of time to get the necessary approvals, and the defendant could not reasonably have expected that he did. Furthermore, the delays and his inability to obtain approvals were caused by the defendant. The delays must be attributed to his zoning and Department of Environmental Protection violations and cease and desist orders, and his futile but prolonged attempts to convince the Town that he was entitled to "free-cut" division of the land. The defendant lays the blame for this at the plaintiffs' doorstep because they refused to alter the configuration of the lots prior to closing. The court finds these accusations of lack of cooperation and breach of an implied covenant of good faith and fair dealing to be misguided.
The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term.
To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith. Bad faith in general implies both actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive . . . Bad faith means more than mere negligence; it involves a dishonest purpose.
(Citations omitted, internal quotation marks omitted.) De La Concha of Hartford, Inc. v. Aetna Life Insurance Company, 269 Conn. 424, 433, 849 A.2d 382 (2004).
The plaintiffs were under no duty to complicate their own legal relationship with each other and the land by changing boundary lines prior to closing. Furthermore, the defendant never filed an application for a subdivision of the land, although there was presented no evidence that such an application would be legally thwarted by the existing configuration of the parcels. Whether the extension of time involved the so called "option phase" or the "application phase" of the original written contract is irrelevant. All the evidence demonstrates that the defendant was to use the additional time to obtain subdivision approval. The exhibits demonstrate that the defendant had from the plaintiffs, in writing, authorization to obtain all permits and file whatever applications were necessary to attain that approval. The plaintiffs did all they were reasonably required to do, and the defendant did not. The defendant has failed to show proof that there was any express oral contract or any implied contract that was breached by the plaintiff entitling the defendant to the return of the $3,000 monthly payments.
The next question presented to the court concerns the existence of a quasi-contract based upon the unjust enrichment of the plaintiffs, which would grant the defendant the right to the return of the approximately $108,000 paid to the plaintiffs or the recovery of his claimed approximately $200,000 of cost and expenses in pursuing Town approvals. "The term quasi-contract describes a situation where there is an obligation or duty arising by law upon which the same remedy is given as would be given if the obligation or duty arose out of contract. The term itself implies that the obligation or duty is not a contractual one." Bartlett v. Raidart, 107 Conn. 691, 694, 142 A. 398 (1928). "It is necessary therefore to determine whether the doctrine of unjust enrichment applies to this situation. This doctrine is based upon the principle that one should not be permitted unjustly to enrich himself at the expense of another but should be required to make restitution of or for property received, retained or appropriated. The obligation to do justice rests upon all persons, natural or artificial. A right of recovery under the doctrine 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." (Citations omitted) Franks v. Lockwood, 146 Conn. 273, 278, 150 A.2d 215 (1959). The defendant did not obtain the necessary subdivision approval within the time frame set forth in his written contract, and desired more time within which to do so. He, as an experienced builder and developer in the area, had superior knowledge and insight to that of the plaintiffs as to what it would take to get done what he needed. He never saw fit to come to any understanding as to how long a period he would have to accomplish his needs. According to the defendant's logic, he had an indefinite period of time, but could terminate the payment of the monthly checks at any time without further liability, and receive all his money back, while the plaintiffs could not initiate an end to the arrangement without liability to the defendant. The court cannot countenance this one-sided result. The plaintiffs gain no windfall by accepting the $3,000 checks; they had the cost of carrying the land, as well as the loss of the value of their investment when the land sale failed to occur. There was no agreement for the return of the money if the transaction never actually was completed. The defendant used the plaintiff's land as he saw fit during the period of permit-seeking. The plaintiffs continually pressed for the setting of a closing date, and for a closing. After three years, it is reasonable that they should demand one, and absent that, an end to the relationship. As for the costs and expenses incurred by the defendant in pursuing the project, this is what he agreed to do in the original contract. There is no evidence that the defendant ever turned over to the plaintiffs, for their benefit, any of the permits he did obtain. In short, the defendant entered into this oral relationship at his own peril. He could not reasonably have believed he could control the disposition of the plaintiffs' land forever. After three years, and fair warning, the plaintiffs took back their property. The court finds that this is not "contrary to equity and good conscience," Franks v. Lockwood, supra, 146 Conn. 278, and that the plaintiffs retained the monies paid by the defendant to keep their property off the market while the defendant essentially possessed an option to purchase it. There is no quasi-contract arising out of any unjust enrichment of the plaintiffs.
II. The Tree Case
In this case, the plaintiffs seek money damages for the defendant's alleged unlawful cutting of trees, specifically treble damages pursuant to Conn. Gen. Statutes § 52-560. Initially, it should be noted that the original written real estate contract between the parties gave the defendant permission to file for all permits and make all applications required to develop the property by subdivision. As stated before, the entire transaction was contingent on the defendant obtaining at least four building lots on the property. This authorization was confirmed in writing several times during the period of the "extension" of the closing date, and it is shown in several of the defendant's exhibits. No one disputes that test holes for septic systems were required, and that some tree removal may have been necessary. The defendant also constructed a rough roadway through the property, claimed to be required for equipment access to the test sites on a very difficult property which contained great quantities of ledge.
Conn. Gen. Statutes § 52-560 reads as follows: " Damages for cutting trees, timber or shrubbery. Any person who cuts, destroys or carries away any trees, timber or shrubbery, standing or lying on the land of another or on public land, without license of the owner, and any person who aids therein, shall pay to the party injured five times the reasonable value of any tree intended for sale or use as a Christmas tree and three times the reasonable value of any other tree, timber or shrubbery but, when the court is satisfied that the defendant was guilty through mistake and believed that the tree, timber or shrubbery was growing on his land, or on the land of the person for whom he cut the tree, timber or shrubbery, it shall render judgment for no more than its reasonable value."
Despite the plaintiffs' contention that the defendant virtually rendered the plaintiffs' property a wasteland, the only allegation of damages in the plaintiffs' complaint concerns the unlawful cutting of trees. The ad damnum clause asks for money damages, and treble damages pursuant to Conn. Gen. Statutes § 52-560. There was no evidence presented concerning the diminution in value of the property. The only evidence of damage was the expert opinion of Bruce Spaman, a Connecticut licensed Arborist, and certified Forester. By systematic statistical sampling of similar adjacent areas, Mr. Spaman estimated that there were 1,485 trees removed from the subject property. By measuring the clear cut area and applying standard tables, the witness determined the quantity of combined sawtimber and firewood removed from the property, and appraised it at $26,964. The plaintiffs asked the court to award them treble that amount pursuant to § 52-560.
Paragraph 4 of the plaintiffs' complaint in the tree case states: "Defendant without authorization, license, prior knowledge or consent of plaintiffs, has entered upon the subject land and has cut damaged, destroyed and/or removed large numbers of trees, timber and shrubbery to the detriment of the property, thereby causing severe and substantial damage to the plaintiffs."
"When damages are claimed they are an essential element of the plaintiff's proof and must be proved with reasonable certainty. Damages are reasonable only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty." (Citations omitted.) 24 Leggett Street Limited Parts. v. Beacon Industries, 239 Conn. 284, 308, 685 A.2d 305 (1996). The plaintiffs claim that $26,964 worth of trees, being 1,485 trees, were removed by the defendant. However, there is no evidence as to the number or value of the trees that by necessity were removed for the digging of test holes, or the construction of the access road for equipment. As stated in Section I, the defendant was clearly given authority to perform the tests required for permits to be wanted by the town. There was no evidence offered to contradict the necessity of removing trees, using heavy equipment to perform these tests, or constructing a roadway for equipment access to the sites. The property contains a total area of approximately 18 acres, likely to yield only four building sites. The land is rough and contains quantities of ledge. By giving authority to the defendant to perform all tests required for subdivision approval, they gave, by implication at the very least, permission to remove those trees reasonably necessary to perform the tests. It was the plaintiffs' burden to prove, with some degree of reasonable certainty, the value of those trees which were not reasonably required to be removed for testing purposes or for access to the building sites. "Damages are an essential element of the plaintiff's proof before he is entitled to recover . . . They must be proved with reasonable certainty." Falco v. James Peter Associates, Inc., 165 Conn. 442, 445, 335 A.2d 301 (1973). "Mathematical exactitude in the proof of damages is often impossible, and . . . all that can be required is that the evidence, with such certainty as the nature of the particular case may permit, lay a foundation which will enable the trier to make a fair and reasonable estimate." (Internal quotation marks omitted). Dooley v. Leo, 184 Conn. 583, 587, 440 A.2d 236 (1981). Nevertheless, the court must have evidence by which it can calculate the damages, which is not merely subjective or speculative, but which allows for some objective ascertainment of the amount. Griffen v. Nationwide Moving and Storage Co., 187 Conn. 405, 420, 446 A.2d 799 (1982). The court has before it only the testimony and report of the plaintiffs' expert, Mr. Spaman. It is impossible for the court to extrapolate from that, other than through guesswork and speculation, the value of sawtimber and firewood not reasonably required to be removed for testing or access purposes. Therefore, the plaintiffs have failed to prove their damages under Conn. Gen. Statutes § 52-560.
The plaintiffs presented a videotape of the subject property which was viewed by the court subsequent to the trial.
III. Conclusion A.
For the reasons set forth in Section I hereof, the court finds in favor of the plaintiffs on their complaint in the Declaratory Judgment case, Docket No. CV 02 0189186, and enters a declaratory judgment that:
1. The written real estate contract between the parties, dated September 15, 1998 is terminated;
2. All parties are released from their respective obligations thereunder; and
3. The property described in said contract is unencumbered by any obligation to the defendant.
The court further finds in favor of the plaintiffs on the defendant's counterclaim.
B.
In the Tree Case, Docket No. CV 020189185, the court finds in favor of the defendant on the plaintiffs' complaint and in favor of the plaintiffs on the defendant's counterclaim.
IV. Attorneys Fees
No attorneys fees are awarded to either party. Neither party was found in default of any particular item, condition or provision of the written contract, but rather the contract expired by its own terms and is deemed terminated. The plaintiffs are not entitled to attorneys fees for anything the defendant did or failed to do during the oral "extension."
The written contract does not specifically authorize filing of a subdivision application until the "application phase," which of course was never reached because the additional $63,000 deposit was never paid. It was replaced by the subsequent oral arrangement for extension of the closing date during which time the defendant was to have gotten subdivision approval.
The defendant has shown no basis for an entitlement to counsel fees.
SO ORDERED.
D'ANDREA, J.