Opinion
No. CV020079784
November 10, 2003
MEMORANDUM OF DECISION RE DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (#105)
Introduction
The complaint in this case is in four counts and alleges, in the First Count, violation of the Connecticut Unfair Trade Practices Act; in the Second Count, breach of contract; in the Third Count, negligence; and, in the Fourth Count, misrepresentation. The complaint alleges that the Defendant, Daniel J. LaPorte Associates ("LaPorte"), is a business which provides residential real estate appraisals and that the Defendant, Arthur M. Golab, is a licensed real estate appraiser employed by LaPorte. The Plaintiffs allege that they contracted to purchase a home at 18 French Road in Bolton, Connecticut, which contract was subject to the Plaintiffs obtaining a CHFA mortgage. CHFA requires a complete survey by an engineer of properties served by a dug well. The contract also contained a rider which provided that it was contingent on the inspection of the well at the property. The Plaintiffs claim that through their lender they retained the services of LaPorte to provide an appraisal of the property. The Defendants created a "Uniform Residential Appraisal Report" in which the well servicing the property was described as a "drilled well" when the Plaintiffs claim the Defendant should have known it was serviced by a dug well. Subsequent to their taking possession of the property, the Plaintiffs discovered that the water supplied from the dug well was unsuitable for human use or consumption thus exposing them and their child to harm and requiring that they install a drilled well. As a result, the Plaintiffs claim to have suffered loss and damage.
The Defendants have moved for summary judgment alleging that: "1) The plaintiffs' claims for negligence and breach of contract are barred by the applicable statute of limitations, C.G.S. Sec. 52-584; 2) The plaintiffs' claims for misrepresentation are barred by the applicable statute of limitations, C.G.S. § 52-577; 3) The plaintiffs' claims for violations of CUTPA are barred by the applicable statute of limitations, C.G.S. § 42-110g(f); 4) The plaintiffs' claims for negligence, breach of contract, violations of CUTPA and negligent misrepresentation are barred by C.G.S. § 36a-755(b)(c); 5) The plaintiffs' claims for breach of contract are not valid or viable because they did not enter into any contracts or agreements with the defendants and were not the third-party beneficiaries of any contracts which the defendants may have had with other parties; 6) The plaintiffs' claims for violations of CUTPA by the defendants are not valid or viable because they did not have any contractual or commercial relationship with the defendants; and 7) The plaintiffs' claims for misrepresentation are not valid or viable because there was no intent by the defendants to defraud or induce reliance by the defendants."
Discussion
The standards for granting summary judgment are well settled. "`Pursuant to Practice Book § 17-49, summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Such questions of law are subject to plenary appellate review.' (Internal quotation marks omitted.) Mytych v. May Dept. Stores Co., 260 Conn. 152, 158-59, 793 A.2d 1068 (2002). In deciding whether the trial court properly determined that there was no genuine issue of material fact, we review the evidence in the light most favorable to the nonmoving party. BD Associates, Inc. v. Russell, 73 Conn. App. 66, 69, 807 A.2d 1001 (2002); Yancey v. Connecticut Life Casualty Ins. Co., 68 Conn. App. 556, 558, 791 A.2d 719 (2002)." Faigel v. Fairfield University, 75 Conn. App. 37, 39-40, 815 A.2d 140 (2003).
"`In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact . . . Although the party seeking summary judgment has the burden of showing the nonexistence of any material fact . . . a party opposing summary judgment must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue.' (Internal quotation marks omitted.) Golden v. Johnson Memorial Hospital, Inc., 66 Conn. App. 518, 522-23, 785 A.2d 234, cert. denied, 259 Conn. 902, 789 A.2d 990 (2001). In ruling on a motion for summary judgment, it is customary for the court to review documentary proof submitted by the parties to demonstrate the existence or nonexistence of issues of material fact. Practice Book § 17-45." Drew v. William W. Backus Hospital, 77 Conn. App. 645, 650 (2003).
The pleadings and other documentation submitted by the parties establish the following undisputed facts. The Plaintiffs entered into a contract to purchase a house at 8 French Road, Bolton, Connecticut. The contract was subject to the Plaintiffs obtaining a CHFA mortgage which imposed a condition that the water supply be inspected. The Plaintiffs paid for a home appraisal/inspection by the Defendants who were selected by the Plaintiffs' lender. The Plaintiffs' lender, Bank of America, hired LaPorte to prepare a Uniform Residential Appraisal Report for the property. LaPorte hired Golab to perform the appraisal. Prior to October 4, 1999, the Defendants, by Golab, examined, inspected and/or appraised the property and created a "Uniform Residential Appraisal Report" regarding the property in which the well serving the property was described as a "drilled well." Neither LaPorte nor Golab entered into any contracts, agreements or covenants with the Plaintiffs. The appraisal report lists Bank of America as the "Lender/Client." The Plaintiffs claim to be third-party beneficiaries of the contract with the Defendants. The Defendants issued their report to the Bank and did not provide it to the Plaintiffs. Neither of the Defendants ever had any discussions with the Plaintiffs regarding the appraisal or the well on the property. The report and any alleged communications between the Plaintiffs and the Defendants were provided through the lender or the real estate agent.
Although certain facts alleged in the complaint have not been admitted by the Defendants in their answer, they have conceded they are undisputed in their Memorandum of Law in Support of Defendants' Motion for Summary Judgment.
Statute of Limitations
In response to the Defendants' motion, the Plaintiffs concede that their claim of negligence is barred by the applicable two-year statute of limitations. Therefore summary judgment shall enter in favor of the Defendants as to the Third Count of the Complaint.
In the Second Count of the complaint the Plaintiffs claim breach of contract. The Defendants claim that this count is actually one in negligence which is also barred by the statute of limitations. The Defendants note that the same allegations of negligence made in the Third Count are made in the Second Count yet are characterized there as breaches of contract. (Second Count, Paragraph 17; Third Count, Paragraph 17.) Those allegations refer to the failure to use due care, to inform the Plaintiffs of and disclose to the Plaintiffs certain information, and to act in a professional, competent and thorough manner. The Defendants cite Gazo v. Stamford, 255 Conn. 245, 263-64 (2001), in which the Court stated: ". . . we look beyond the language used in the complaint to determine what the plaintiff really seeks. Just as `[p]utting a constitutional tag on a nonconstitutional claim will no more change its essential character than calling a bull a cow will change its gender'; State v. Gooch, 186 Conn. 17, 18, 438 A.2d 867 (1982); putting a contract tag on a tort claim will not change its essential character. An action in contract is for the breach of a duty arising out of a contract; an action in tort is for a breach of duty imposed by law. `[W]hen the claim is one for personal injury, the decision usually has been that the gravamen of the action is the misconduct and the damage, and that it is essentially one of tort, which the plaintiff cannot alter by his pleading.' W. Prosser, Torts (3d Ed. 1964) § 94, pp. 642-43. It is clear that the gravamen of the plaintiff's third-party beneficiary contract theory is in reality a tort arising out of a contract. `It is true, of course, that out of a contractual relationship a tort liability, as in negligence, may arise.' Kaplan v. Merberg Wrecking Corp., 152 Conn. 405, 410, 207 A.2d 732 (1965); see also Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 475, 427 A.2d 385 (1980) ('[t]he argument that contract rights . . . may yet give rise to liability in tort . . . is not a novel one'). This is manifest from the fact that the plaintiff's allegations of liability and damages sound, not in contract, but in tort . . . The usual recovery for breach of a contract is the contract price or the lost profits therefrom . . . The plaintiff does not seek the contract price paid by Chase Bank for the work done by Pierni or any lost profits. Instead, the plaintiff seeks recovery for his physical and mental pain and suffering, lost wages and medical bills resulting from Pierni's negligence . . . It is clear, therefore, that although the plaintiff has cast this claim in contractual language, in essence he seeks a tort recovery." (Footnotes omitted.)
Here the damages alleged by the Plaintiffs involve "physical harm," "emotional distress," "loss of value and the use and enjoyment of the Property." (Second Count, Paragraphs 18, 19, 22.) These damages, as well as the allegations regarding breach, sound in negligence rather than contract.
Therefore summary judgment shall enter in favor of the Defendants as to the Second Count of the Complaint since it is in reality a negligence claim which is barred by the statute of limitations.
As to the Fourth Count, the Defendants argue that the claim for misrepresentation set forth therein is also barred by the applicable statute of limitations, here the three-year limit set forth in General Statutes § 52-577. The Defendants claim that the misrepresentation occurred on October 4, 1999, when the appraisal report was signed, and the writ here was not served until October 4, 2002. The Defendants argue that this is outside the period of the statute of limitations. The Defendants' claim is without merit. In Stingone v. Elephant's Trunk Flea Market, 53 Conn. App. 725, 730 (1999), the court found that completing service as allowed by the statute exactly to the day by years from the date the statute of limitations began to run was sufficient. The court stated: "In this case, the plaintiff delivered her writ of summons and complaint to the sheriff for service on September 11, 1996, two years to the day following the alleged accident. Thereafter, on September 12 and 15, 1996, respectively, the defendants, Ideational Hybrid Corporation and Elephant's Trunk Flea Market, were served with process. Accordingly, we find that since the plaintiff delivered her process to the sheriff within the two year time period provided by § 52-584, and since the defendants were served `within fifteen days of [that] delivery,' the plaintiff's cause of action was not time-barred. See General Statutes § 52-593a."
Similarly, as to the First Count, the Defendants' claim that the Plaintiffs' CUTPA claim was not brought within the three-year period required by General Statutes § 42-110b is without merit.
General Statutes § 36a-755
The Defendants claim that the Plaintiffs' remaining CUTPA and misrepresentation claims in the First and Fourth Count are precluded by General Statutes § 36a-755. That statute provides:
(b) Any financial institution which directly or indirectly imposes a fee on any applicant for an appraisal on real property to secure a mortgage loan shall make available to such applicant at no charge a copy of the appraisal report promptly after the financial institution's receipt of the applicant's written request for a copy of the appraisal report, provided the financial institution receives the written request not later than ninety days after the financial institution has provided the applicant with notice of action taken on the applicant's application or not later than ninety days after the application is withdrawn by the applicant, as applicable. (c) Any financial institution which directly or indirectly imposes a fee on any applicant for an appraisal shall either (1) notify such applicant in writing of the availability of a copy of the appraisal report or (2) provide such applicant with a copy of the appraisal report at no charge, such notice or copy to be provided not later than ten days after receipt of the appraisal report, but in any event not later than the date on which the sale of such property is to be consummated. (d) Any person who prepares such appraisal report shall not be liable to any person with whom the preparer has not contracted to make such appraisal report for opinions or facts stated in or omitted from such appraisal report, unless such statement or omission results from intentional misrepresentation.
Consequently, the Defendants claim that in order for the Plaintiffs to pursue their claim under CUTPA the Plaintiffs must demonstrate that they were in privity of contract with the Defendants. The Defendants cite Depamphilis v. Casey, Superior Court, Judicial District of Hartford/New Britain at Hartford, Docket No. CV 930531526, 14 Conn. L. Rptr. 232 (May 5, 1995, Berger, J.), in support of their position. There the Plaintiff sued the company which did the appraisal for his mortgage lender. In the report, the appraiser stated the property was connected to the municipal sewer system and that the home was resting on a concrete slab. Both statements were false. The complaint alleged breach of contract, negligence and violation of CUTPA. The court granted the appraiser's motion for summary judgment. In light of the language of General Statutes § 36a-755(d) and the fact that the Plaintiff had not alleged misrepresentation, the court determined that the only question presented for purposes of the motion was whether the appraiser had entered into a contract with the plaintiff for the appraisal of the property. Finding that the Plaintiff had not, the court rejected the Plaintiffs third-party beneficiary theory noting that "[b]y advancing its idea of a `common law right to bring suit,' however, the plaintiff ignores the very purpose behind § 36a-755(d): to abrogate the common-law rule and require privity as a requirement to recovery. Though there very well might be a question as to whether the plaintiff is a third-party beneficiary, this inquiry is immaterial given the express exclusion in § 36a-755(d) of parties not in privity — including third-party beneficiaries — from those who may seek redress against an offending appraiser." Here the Plaintiffs also claim, that although they did not have a contract with the Defendants, they are third-party beneficiaries of a contract with them. However this concession does not foreclose the Plaintiffs here because, unlike the Plaintiff in Depamphilis, the Plaintiffs here make a claim, in the Fourth Count of their complaint, that the representations made by the Defendants were "false statements of material facts" and that "[i]n making these misrepresentations, Defendants did not exercise reasonable care or competence, and the Plaintiff reasonably relied to their detriment upon these representations." (Fourth Count, Paragraphs 16, 17.) Therefore the dispositive question here becomes whether the Plaintiffs have alleged "intentional misrepresentation" within the language of General Statutes § 36a-755 such as to take this action outside its preclusive effect.
"`Intentional misrepresentation is synonymous with fraudulent misrepresentation.' St. Denis v. DeToledo, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 00 0180606 (April 5, 2002, Downey, J.)." Kenney v. McClatchie, Superior Court, Judicial District of New Haven at New Haven, Docket No. CV 01 0450368 (May 6, 2003, Gilardi, J.). "The essential elements of an action in common law fraud, as we have repeatedly held, are that: (1) a false representation was made as a statement of fact; (2) it was untrue and known to be untrue by the party making it; (3) it was made to induce the other party to act upon it; and (4) the other party did so act upon that false representation to his injury. Billington v. Billington, 220 Conn. 212, 217, 595 A.2d 1377 (1991); Kilduff v. Adams, Inc., 219 Conn. 314, 329, 593 A.2d 478 (1991); Maturo v. Gerard, 196 Conn. 584, 587, 494 A.2d 1199 (1985). The party asserting such a cause of action must prove the existence of the first three of these 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.' Rego v. Connecticut Ins. Placement Facility, 219 Conn. 339, 343, 593 A.2d 491 (1991); Kilduff v. Adams, Inc., supra, 327." Barbara Weisman, Trustee v. Kaspar, 233 Conn. 531, 539-40 (1995).
"Negligent misrepresentation involves `[o]ne who, in the course of his business, profession or employment . . ., supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information . . . [T]he plaintiff need not prove that the representations made by the [defendant] were promissory. It is sufficient . . . that the representations contained false information . . . There must be a justifiable reliance on the misrepresentation for a plaintiff to recover damages.' (Citation omitted; emphasis in original, internal quotation marks omitted.) Mips v. Becon, Inc., 70 Conn. App. 556, 558, 799 A.2d 1093 (2002)." Kenney v. McClatchie, Superior Court, Judicial District of New Haven at New Haven, Docket No. CV 01 0450368 (May 6, 2003, Gilardi, J.).
"Allegations such as misrepresentation and fraud present issues of fact. Maturo v. Gerard, 196 Conn. 584, 587, 494 A.2d 1199 (1985). Moreover, `[w]hether evidence supports a claim of fraudulent or negligent misrepresentation is a question of fact.' McClintock v. Rivard, 219 Conn. 417, 427, 593 A.2d 1375 (1991). `It is . . . well recognized that summary judgment procedure is particularly inappropriate where the inferences which the parties seek to have drawn deal with questions of motive, intent and subjective feelings and reactions . . . It is only when the witnesses are present and subject to cross-examination that their credibility and the weight to be given to their testimony can be appraised.' (Citations omitted; internal quotation marks omitted.) United Oil Co. v. Urban Redevelopment Commission, 158 Conn. 364, 376, 260 A.2d 596 (1969). Nevertheless, it remains `incumbent upon the party opposing summary judgment to establish a factual predicate from which it can be determined as a matter of law, that a genuine issue of material fact exists.' Connell v. Colwell, supra, 251." Miller v. Bourgoin, 28 Conn. App. 491, 497-98 (1992).
A review of the allegations of the Fourth Count of the complaint reveals that they support at most a claim of negligent, rather than intentional, misrepresentation, and as such are precluded by General Statutes § 36a-755. Even if one views the allegations as asserting a claim of intentional misrepresentation, the evidence submitted does not support such a claim. In support of their motion for summary judgment, Daniel LaPorte, President of LaPorte, and Golab submit their affidavits stating they never intended to misrepresent, either intentionally or negligently, any facts in the appraisal report. In response, the Plaintiffs claim that the evidence reveals that the Defendants knew that the Plaintiffs were the intended purchaser, that they would receive a copy of the appraisal report and that the Defendants were fully aware that under CHFA/HUD standards a dug well was unacceptable without an engineering evaluation. However, these facts do not raise to the level of clear and convincing evidence of an intent on the part of the Defendants to commit a fraud upon the Plaintiffs. "Fraud, of course, is not to be presumed and must be strictly proven by clear, precise and unequivocal evidence. Creelman v. Rogowski, 152 Conn. 382, 384, 207 A.2d 272; Busker v. United Illuminating Co., 156 Conn. 456, 458, 242 A.2d 708, reaffirmed in Dacey v. Connecticut Bar Assn., 170 Conn. 520, 534, 368 A.2d 125. The intent to defraud involves a state of mind and must usually, as was the case here, be proven by circumstantial evidence. Busker v. United Illuminating Co., supra, 459; Paul Bailey's Inc. v. Commissioner of Motor Vehicles, 167 Conn. 493, 498, 356 A.2d 114 . . . Intention is a mental process, and of necessity it must be proved by the statement or acts of the person whose act is being scrutinized. State v. Mazzadra, 141 Conn. 731, 735, 109 A.2d 873. A person's intention in any regard is to be inferred from his conduct; Kiernan v. Borst, 144 Conn. 1, 6, 126 A.2d 569; and ordinarily can be proven only by circumstantial evidence. State v. Sul, 146 Conn. 78, 87, 147 A.2d 626." (Internal quotation marks omitted.) DeLuca v. C.W. Blakeslee Sons, Inc., 174 Conn. 535, 546 (1978).
Here the evidence presented by the Plaintiffs in opposition to the motion for summary judgment is insufficient to raise an issue of material fact as to whether the Defendants engaged in intentional misrepresentation when they stated in their appraisal report that there was drilled well on the property. At most it raises an issue as to whether there was negligent misrepresentation. There being insufficient proof of any intentional misrepresentation, General Statutes § 36a-755 precludes an action by the Plaintiffs against the Defendants. Therefore the Defendants' Motion for Summary Judgment is granted as to the First and Fourth Counts of the Complaint.
Conclusion
The Defendants' Motion for Summary Judgment is granted as to all counts of the Plaintiffs' complaint.