Opinion
CV146044500S
07-25-2017
Gary H. Geller et al. v. Paul F. DeFalco et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
SYBIL V. RICHARDS, JUDGE.
This matter involves the plaintiffs' fourth amended, six-count complaint in which the plaintiffs allege, among other things, that the defendants knew or should have known of the existence of prior problems with the well that services the water needs of the residential property located at 20 Sunset Ridge Drive, Guilford, Connecticut (" property"), which the plaintiffs purchased from the sellers. The defendants deny mostly all of the claims made by the plaintiffs and argue, in response, that the water flow was impacted by the fact that the plaintiffs tripled the number of individuals who were residing at the property. The matter was tried to the court on December 22, 2016 at which the court heard testimony from the parties and various witnesses and admitted exhibits into evidence. After the conclusion of the trial, the parties submitted briefs relating to questions raised by the court. The parties' briefs also addressed the defendants' motion for judgment of dismissal pursuant to Practice Book § 15-8.
The remaining defendants are DeFalco and his wife, Sherri-Lee Flood. The defendants are collectively referred to as the " defendants" and otherwise are individually referred to as DeFalco and Flood, as the case may be.
Except as otherwise admitted by the defendants, which admissions and/or responses are immaterial for purposes of this decision.
However, the court notes that the defendant husband testified that the defendants' daughter lived at the property until she went to college in 2008; thus, there were actually three individuals residing at the property for a certain, albeit unspecified, limited period of time when the defendants owned the property.
I. Facts
Based upon the relevant and credible evidence presented, the court makes the following factual findings. On July 14, 2006, the defendants purchased the subject property, which was described as a 1.09-acre, custom built, 3, 694 square feet, cape cod style home with three or possibly four bedrooms (with the master bedroom being located on the main level), 2.5 baths and a three-car attached garage. Construction of the property was completed in 2007. In preparation for the pending sale of the property, in anticipation of the closing, the sellers completed the " seller's disclosure statement for residential property" form on September 28, 2012. On said form, with respect to question number 12 in particular, there is the following question: " [a]re you aware of any problem with the well or domestic water quality, quantity, recovery and/or pressure? [i]f yes, explain" and the sellers answered " no." Before the sale was consummated, the plaintiffs retained a home inspector. The home inspection report contained a disclaimer that indicated that a well recovery test had not been performed and the water pressure test performed was not a substitute for said recovery test. Although the court heard or admitted evidence relating to the relationship, pre- and post-sale, between the parties, the sellers alleged dissatisfaction with the work performed by one of the well contractors they engaged and the configuration of the layout of the interior of the house, the court finds that the pivotal point on which the question before the court turns is, ultimately, whether the sellers failed to disclose any knowledge they had or should have had regarding the history of problems with the well in relation to its condition, capacity and output as claimed by the buyers.
The home inspection report also indicated that the radon level was very high.
Thus, the court will now recite the pertinent, chronological history of the wells located at the property in order to address the question presented above. On November 30, 2006, the original well (" original well") that was connected to the property was drilled. In 2008, DeFalco entered into a contract with Eastern Water Solutions for the installation of a complete pump system. Eastern guaranteed the work for one year from the date of installation, reflected as October 1, 2008, according to the paid receipt that shows DeFalco paid Eastern $7,040.08 for a constant pressure system that was installed into the original well. On August 10, 2010, DeFalco placed a service call to Eastern. In response to said call, Eastern prepared an invoice that contained the following notation, in relevant part: " service call- no water, check station level, check wires, check air charge pump, cannot keep up with demand ." (Emphasis added by the court.) DeFalco paid Eastern $166.95 for the work that Eastern performed. On August 25, 2010, DeFalco paid Eastern $382.19 for a " yield test, 1" brass sld. check valve, 1" nylon male adaptor." On August 28, 2010, Eastern prepared another work order that contained the following words: " pulled pump off-did performance test, also changed check valve on tank, pump running according to book at present, static did not run out or stop, recommend hydrofrac if problem persists ." (Emphasis added by the court.) In a letter dated September 6, 2010, following a recent service visit by Eastern technicians, DeFalco wrote a letter to Eastern expressing his frustration with Eastern's responsiveness and preparedness of its technicians to make service calls. As DeFalco explained in said letter, he was unhappy with, among other things, the fact that, in connection with the last service call, the first technician did not come equipped with a " . . . sonic device that was needed to accurately determine the level of water in the well . . . On the second visit, your service techs observed the pump functioning normally. As I explained to you; I unfortunately had to put water in my well from a neighbor's well because I was not going to be able to wait two weeks for a service call, which in of itself is pretty bad. This did have an effect of bringing the water level up in the well, which did not create the same conditions that existed during the first service call." Then, on September 8, 2010, a well drilling permit was pulled for a new well because the original well had " no yield" according to the well drilling completion report.
The defendants paid $9,525 to Savinelli Well Drilling Co., Inc. for the installation of the new well (" new well") but the new well's installation has no bearing on the issue before the court as the new well was not connected to the property.
In their fourth amended complaint, the plaintiffs allege the following specific counts: negligence (count one); misrepresentation (count two); fraud (count three); covenant of good faith and fair dealing (count six); violation of General Statutes § 20-327b; unjust enrichment (count eight). The plaintiff seeks monetary damages, punitive damages, exemplary damages representing the costs of litigation, attorneys fees, recision of the (purchase and sale) contract and return of consideration paid by the plaintiffs to the defendants and such other relief as the court deems fair and proper. For the most part, the defendants deny the claims made by the plaintiff.
II. Discussion
The court begins by citing the applicable rules of law in the context of addressing each of the plaintiffs' allegations.
A. Negligence
According to common law, " [t]he essential elements of a cause of action in negligence are well established: duty [of care]; breach of that duty; causation; and actual injury . . . A duty to use care may arise from a contract, from a statute, or from circumstances under which a reasonable person, knowing what he knew or should have known, would anticipate that harm of the general nature of that suffered was likely to result from his act or failure to act." (Citations omitted; internal quotation marks omitted.) Sturm v. Harb Dev., LLC, 298 Conn. 124, 139-40, 2 A.3d 859 (2010), cited by our Supreme Court in Bifolck v. Philip Morris, Inc., 324 Conn. 402, 152 A.3d 1183 (2016).
" Duty is a legal conclusion about relationships between individuals, made after the fact, and [is] imperative to a negligence cause of action." (Internal quotation marks omitted.) Doe v. Saint Francis Hospital & Medical Center, 309 Conn. 146, 174, 72 A.3d 929 (2013).
The court finds that the plaintiffs failed to meet their burden of proof in relation to this cause of action as they failed to establish any of the elements.
B. Misrepresentation
" A cause of action for intentional misrepresentation is essentially a claim of fraud." Martinez v. Zovich, 87 Conn.App. 766, 778, 867 A.2d 149, cert. denied, 274 Conn. 908, 876 A.2d 1202 (2005).
" [A] plaintiff may seek relief under § 20-327b only for a knowing misrepresentation in the statutory report." (Emphasis in original; internal quotation marks omitted.) Dockter v. Slowik, 91 Conn.App. 448, 457, 881 A.2d 479, cert. denied, 276 Conn. 919, 888 A.2d 87 (2005). " Our legislature enacted § 20-327b, otherwise known as the Uniform Property Disclosure Condition Act, to reduce the risk of miscommunication regarding residential property between a vendor and a prospective purchaser . . . Such a report is limited to the vendor's actual knowledge . General Statutes § 20-327b(d)(2)(A). The statute requires every report to include a provision that encourages the potential purchaser to have the property inspected by a professional inspector. General Statutes § 20-327b(d)(2)(B). Furthermore, the § 20-327b report must inform the purchaser that any representation made by the vendor does not constitute a warranty by the vendor. General Statutes § 20-327b(d)(2)(D). At the same time that the legislature enacted this statute, it also enacted § § 20-327d . . . and 20-327e . . . These statutes underscore the legislature's intent with respect to statements in a § 20-327b report. Section 20-327d provides that § 20-327b does not create any new express or implied warranties by the vendor. It states that a vendor is not required to obtain a preconveyance inspection or a test with respect to the physical condition of the property. Moreover, § 20-327e reiterates that the representations made by the vendor are limited to information about which the vendor has actual knowledge." (Citation omitted; emphasis in original; internal quotation marks omitted.) Giametti v. Inspections, Inc., 76 Conn.App. 352, 358-59, 824 A.2d 1 (2003).
Speaking of Giametti, our appellate court affirmed its holding in the case of Hull v. Fonck, 122 Conn.App. 286, 999 A.2d 775 (2010), at which it held " that, as a matter of law, although a disappointed purchaser of residential property has no damages claim for an innocent misstatement in a § 20-327b report; id., at 360, 824 A.2d 1; such a purchaser may maintain a common-law action for negligent misrepresentation therein. Id., at 362, 824 A.2d 1."
" Usually, mere nondisclosure does not amount to fraud . . . Nondisclosure may, however, amount to fraud when there is a failure to disclose known facts under circumstances that impose a duty to speak . . . In addition, once a vendor undertakes to speak on a subject, the vendor must then make a full and fair disclosure as to that subject." (Citations omitted.) Bernard v. Gershman, 18 Conn.App. 652, 656, 559 A.2d 1171 (1989).
It is quite apparent from the record that there were in fact prior issues with the original well when the defendants owned and were residing at the property despite their defendants' protestations to the contrary. Between 2008 and 2010, for instance, the evidence shows that the defendants placed a " no water" call, had a new pump system installed and had to resort to connecting to their neighbor's well for their water needs. The defendants also received a recommendation about hydrofracing from Eastern if problems persisted. Thus, they were aware of issues with the yield and backflow of the original well in advance of executing the disclosure form and selling the property to the plaintiffs. DeFalco offered testimony in which he provided a narrow view of his understanding of what constitutes a well, one that apparently did not include a pump or a conditioning system or any type of mechanism that works in tandem with a well or enhances its performance. The court finds his testimony in this regard to be unconvincing and evidence presented that attempted to suggest a difference of opinion about his understanding of what a well is to be unpersuasive.
C. Fraud
" The essential elements of an action in fraud, as we have repeatedly held, are: (1) that a false representation was made as a statement of fact; (2) that it was untrue and known to be untrue by the party making it; (3) that it was made to induce the other party to act on it; and (4) that the latter did so act upon it to his injury." (Internal quotation marks omitted.) Updike, Kelly & Spellacy, P.C. v. Beckett, 269 Conn. 613, 643, 850 A.2d 145 (2004). " A party alleging fraudulent misrepresentation must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which higher standard we have described as clear and satisfactory or clear, precise and unequivocal." (Internal quotation marks omitted.) Wallenta v. Moscowitz, 81 Conn.App. 213, 220, 839 A.2d 641, cert. denied, 268 Conn. 909, 845 A.2d 414 (2004). " 'Clear and satisfactory' evidence is the equivalent to 'clear and convincing' evidence." (Internal quotation marks omitted.) Id.
As stated above, the court finds that the defendants had knowledge of problems with the original well and had service calls in relation to it as well. But, the court agrees with the defendants that the plaintiffs failed to sustain their burden of proving all of the elements by clear and satisfactory evidence. Thus, the court concludes that this count fails on the ground that the plaintiffs did not meet their evidentiary burden of proof.
D. Covenant of Good Faith and Fair Dealing
" [i]t is axiomatic that the duty . . . of good faith and fair dealing is a covenant implied into a contract or a contractual relationship . . . [E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement . . . 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 . . . In accordance with these authorities, the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing." Miller v. Guimaraes, 78 Conn.App. 760, 772-73, 829 A.2d 422 (2003), quoting Macomber v. Travelers Property & Casualty Corp., 261 Conn. 620, 638, 804 A.2d 180 (2002). " To recover for breach of the duty of good faith and fair dealing, the plaintiffs had to allege and prove that the defendants] engaged in conduct designed] to mislead or to deceive . . . 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 . . ." (Emphasis in original; internal quotation marks omitted.) Id., at 773. " 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." Alexandru v. Strong, 81 Conn.App. 68, 80-81, 837 A.2d 875, cert. denied, 268 Conn. 906, 845 A.2d 406 (2004).
The court finds that the plaintiffs have not satisfied their evidentiary burden with respect to this claim and the elements related thereto including, but not limited to, bad faith.
E. Violation of General Statutes § 20-327b
Section 20-327b. Residential condition reports. Exemption. Regulations. (a) Except as otherwise provided in this section, each person who offers residential property in this state for sale, exchange, or for lease with option to buy, shall provide a written residential condition report to the prospective purchaser at any time prior to the prospective purchaser's execution of any binder, contract to purchase, option or lease containing a purchase option. A photocopy, duplicate original, facsimile transmission or other exact reproduction or duplicate of the written residential condition report containing the prospective purchaser's written receipt shall be attached to any written offer, binder or contract to purchase. A photocopy, duplicate original, facsimile transmission or other exact reproduction or duplicate of the written residential condition report containing the signature of both seller and purchaser shall be attached to any agreement to purchase the property."CGS section 20-327b.
" [A] plaintiff may seek relief under § 20-327b only for a knowing misrepresentation in the statutory report." (Emphasis in original; internal quotation marks omitted.) Dockter v. Slowik, 91 Conn.App. 448, 457, 881 A.2d 479, cert. denied, 276 Conn. 919, 888 A.2d 87 (2005). " Our legislative enacted § 20-327b, otherwise known as the Uniform Property Disclosure Condition Act, to reduce the risk of miscommunication regarding residential property between a vendor and a prospective purchaser . . . Such a report must include a provision informing the purchaser that any misrepresentation made by the vendor in the § 20-327b report is limited to the vendor's actual knowledge . General Statutes § 20-327b(d)(2)(A). The statute requires every report to include a provision that encourages the potential purchaser to have the property inspected by a professional inspector. General Statutes § 20-327b(d)(2)(B). Furthermore, the § 20-327b report must inform the purchaser that any representation made by the vendor does not constitute a warranty by the vendor. General Statutes § 20-327b(d)(2)(D). At the same time that the legislature enacted this statute, it also enacted § 20-327d . . . and 20-327e . . . These statutes underscore the legislature's intent with respect to statements in a § 20-327b report. Section 20-327d provides that § 20-327b does not create any new express or implied warranties by the vendor. It states that a vendor is not required to obtain a preconveyance inspection or a test with respect to the physical condition of the property. Moreover, § 20-327e reiterates that the representations made by the vendor are limited to information about which the vendor has actual knowledge." (Citations omitted; emphasis in original; footnotes omitted; internal quotation marks omitted.) Giametti v. Inspections, Inc., 76 Conn.App. 352, 358-59, 824 A.2d 1 (2003).
The court's holding related to this cause of action is more fully discussed above.
F. Unjust Enrichment
" Unjust enrichment is a very broad and flexible equitable doctrine that has as its basis the principle that it is contrary to equity and good conscience for a defendant to retain a benefit that has come to him as the expense of the plaintiff . . . The doctrine's three basic requirements are that (1) the defendant was benefitted, (2) the defendant unjustly failed to pay the plaintiff for the benefits, and (3) the failure of payment was to the plaintiff's detriment." Gagne v. Vaccaro, 255 Conn. 390, 409, 766 A.2d 416 (2001).
" [T]he measure of damages in an unjust enrichment case ordinarily is not the loss to the plaintiff but the benefit to the defendant . . . Where damages are approximate but difficult to prove the law eschews the necessity of mathematical exactitude. Such 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." (Citation omitted; internal quotation marks omitted.) Hartford Whalers Hockey Club v. The Uniroyal Goodrich Tire Co., 231 Conn. 276, 285, 649 A.2d 518 (1994). " In the absence of a benefit to the defendants], there can be no liability in restitution [on a theory of unjust enrichment]." (Internal quotation marks omitted.) Russell v. Russell, 91 Conn.App. 619, 640, 882 A.2d 98, cert. denied, 276 Conn. 924, 925, 888 A.2d 92 (2005).
Although the plaintiffs demonstrated that they purchased the property from the defendants for $770,000, they presented no evidence that the defendants received an amount in excess of the value of the property. " In the absence of a benefit to the defendants], there can be no liability in restitution [on a theory of unjust enrichment]." (Internal quotation marks omitted.) Russell v. Russell, 91 Conn.App. 619, 640, 882 A.2d 98, cert. denied, 276 Conn. 924, 925, 888 A.2d 92 (2005). Therefore, the court finds that this count too must fail because the plaintiffs did not meet their burden in proving their unjust enrichment claim.
III. Motion for Judgment of Dismissal
Practice Book § 15-8 provides: " If, on the trial of any issue of fact in a civil matter tried to the court, the plaintiff has produced evidence and rested, a defendant may move for judgment of dismissal, and the judicial authority may grant such motion if the plaintiff has failed to make out a prima facie case. The defendant may offer evidence in the event the motion is not granted, without having reserved the right to do so and to the same extent as if the motion had not been made."
For the reasons cited herein, the court denies the defendants' motion for a judgment of dismissal as the court entered judgment in favor of the plaintiff's finding that the plaintiffs' did indeed make out a prima facie case in connection with one of the allegations in their fourth amended complaint.
IV. Conclusion
Based on the foregoing reasons, the court enters judgment on behalf of the plaintiffs on the negligent misrepresentation count as the court concludes that the defendants' failure to make full disclosure about the original well and its ensuing output issues and repairs and service calls was tantamount to an intentional false representation made to induce the plaintiffs to acquire title to the property. The amount of judgment so entered in favor of the plaintiffs is damages in the amount of $25,000 and their reasonable attorneys fees and costs as will be later determined at a hearing upon motion. The court denies any and all other claims and requests for relief made by the parties.