Opinion
CV176031545
10-11-2019
J.R. VINAGRO CORPORATION v. GOLDBERG ESTATES, LLC et al.
UNPUBLISHED OPINION
OPINION
Swienton, J.
This is an action by the plaintiff, J.R. Vinagro Corporation (Vinagro), against the defendant, Goldberg Estates, LLC (Goldberg Estates or the defendant), in which Vinagro is claiming non-payment for work performed pursuant to an agreement dated December 22, 2016. The operative complaint is dated September 20, 2017, and is in two counts: count one is against Goldberg Estates, LLC, and count two is against Hudson Insurance Company as surety in which it promises to pay the plaintiff for its services, costs and fees, if the court finds in favor of the plaintiff. Goldberg Estates denies the plaintiff’s claim, and raised five special defenses as well as claiming a setoff. The defendant is claiming as special defenses: payment, fraud in the inducement, negligent misrepresentation, equitable estoppel, and breach of covenant of good faith and fair dealing. In addition, Goldberg Estates filed a counterclaim alleging it suffered losses as a result of the alleged delay by the plaintiff in completing the work, and payment for damages to a roadway.
A court trial was held on September 11 and September 17, 2019. Both the plaintiff and the defendant were represented by counsel. At trial, the court heard testimony from Timothy O’Donoghue, the sales manager from Vinagro, and two Vinagro employees: Nicholas Innocenti and Steve Lombardi. The court heard testimony from Rodney Goldberg, the principal of Goldberg Estates, LLC, (Goldberg), Salvatore Tassone, the town of Colchester’s town engineer, and Martin Wright. The court ordered simultaneous briefs to be filed by October 3, 2019.
The plaintiff requested that, if the court found in favor of its claims, a separate hearing be held on the issue of the award of attorneys fees pursuant to the agreement.
I
FINDINGS OF FACT
"In a bench trial ... the court sits as the trier of fact ..." (Internal quotation marks omitted.) Knock v. Knock, 224 Conn. 776, 793, 621 A.2d 267 (1993). The court makes the following findings of fact.
Vinagro Corporation is a business that is involved in heavy hauling, demolition and portable rock crushing. The business was contacted by Rodney Goldberg, a principal of Goldberg Estates, who was involved in a residential development in Colchester, Connecticut, to obtain a quote for the breaking up and crushing of rocks and stones retrieved from the clearing of the lots and roads for the development. Vinagro’s sales manager, Timothy O’Donoghue, spoke to Goldberg, and had several conversations prior to the final contract being signed.
The stones and rocks that were to be crushed were in a pile located on the property. Goldberg told O’Donoghue that he wanted "the whole pile crushed, everything crushed," and told O’Donoghue it was 5000 cubic yards. On November 4, 2016, O’Donoghue sent an e-mail to Goldberg stating: "As I was saying in our conversation yesterday I believe you have 10-12 days of preparation work and based of [sic] your survey of about 5, 000 yards it could be crushed in 3-4 days." Defendant’s Exh. B, Emphasis added. "Assuming there is 10 days of preparation work and 4 days of crushing with J.R. Vinagro Corp. moving the finished product here [sic] rough break down of the cost." Id., Emphasis added, boldface in original. The e-mail also contained prices for the rental of the equipment and costs for preparation. "Total here is $76,850.00 bases [sic] on 10 days prep and 4 days crushing." Id.
The Crushing Services Contract was drafted and prepared by Vinagro, and Goldberg made three handwritten modifications to the one-page contract. The agreement provided for crushing services located at White Tail Lane, Colchester, with Vinagro providing the crushing equipment to crush rock, and was detailed as to costs and conditions of the agreement between the parties. The contract did not contain any estimates of the amount of rock to be crushed, nor did it provide for any estimates of the length of time the work would be performed. Goldberg signed the contract on December 22, 2016, and returned it to Vinagro via facsimile on that date. Vinagro began the work on December 20, 2017, starting with the preparation which ran through February 15, 2017, and continued until its completion on March 13, 2017.
Goldberg Estates contends that the contract was sent with the November 4, 2016 e-mail, but there is no credible evidence to support this. There is no dispute that Goldberg signed the contract on December 22, 2016, and returned it to Vinagro.
Goldberg received daily time slips for the work and time performed by Vinagro at the property, and also received weekly invoices for the billing related to the work until the completion of the project in March 2017. The daily time slips were signed off on by Goldberg, and at no time did Goldberg challenge, argue, or dispute the time slips or the billings he received. Plaintiff’s Exh. 2.
Vinagro was responsible for breaking the stones to suitable size with an excavator fitted with a hammer, the defendant would provide an operator for an excavator to feed the broken stone into the Vinagro crushers as well as an operator for the pay loader, Vinagro would crush the stone into processed material, and the defendant would pay the fuel costs for all equipment on the project. As stated, daily slips were generated for Goldberg’s review, and tonnage amounts were written on the slips per Goldberg’s request. During the course of the project, there were several down times due to equipment failure, and the defendant was not charged for the time the machines were down. Again, Goldberg never raised an issue as to how long the job was taking or the cost of the project.
Goldberg testified that he talked to employees on the job site as well as O’Donoghue about the length of time the job was taking. He also testified that he requested on several occasions a larger excavator which would speed the process. Vinagro denies that Goldberg ever complained about the length of time the job was taking, or communicated any concerns to its employees. The general supervisor on the project, Steve Lombardi, testified credibly that part of the issue with the length of time the job was taking was due to the defendant’s employees who were loading the rocks into the feeder, and too much material being fed too quickly. As a result, the jaws of the crusher would jam up, causing delays. An employee of the defendant, Martin Wright, testified that he observed occasions of breakdowns of equipment and delays, but his observations do not support the defendant’s testimony that any communications were made to the Vinagro employees that there was any dissatisfaction with how the project was being handled. The court credits the testimony of O’Donoghue, as well as the two other employees of Vinagro that testified. If Goldberg was so unhappy with the progress of the job, why did he sign off on the time slips or the invoices sent to him on a weekly basis? There was a number of instances where there was conflicting versions, and O’Donoghue was the more credible witness, while Goldberg was surprisingly evasive and uncandid.
The defendant is also disputing the amounts he was charged on the invoices, arguing that he was charged a daily rate rather than the weekly rate. Again, this was never brought to anyone’s attention either during the time the project was ongoing, or during the pendency of this action, or during any of the settlement negotiations, or in any of its pleadings. The court discredits the defendant’s testimony and evidence regarding this issue.
On March 13, 2017, Vinagro concluded its work, and removed its equipment. The total amount billed to the defendant was $135,636.75, and the defendant had paid $48,380, leaving a balance owed of $87,256.75. A mechanic’s lien was recorded on April 13, 2017, with the town clerk for the town of Colchester. A payment was made of $20,000 after the recording of the lien in order to receive a partial lien release. The total amount claimed to be owing is $67,256.75.
In addition to the special defenses filed by the defendant, a counterclaim was also filed claiming damages to a road, and for damages suffered in the alleged delay of the project.
On March 20, 2017, the town engineer for Colchester, Salvatore Tassone, e-mailed Goldberg with issues relating to a section of paved road on White Tail Lane. Tassone had inspected the road and observed scuff marks, which he surmised had been created by steel tracking equipment, as well as an oil spill near the center of the cul-de-sac along with some sedimentation on the road pavement. Tassone indicated that he had no knowledge as to how these tracking scuff marks were made, and his concern was not the oil spill or sedimentation, but the scuff marks on the roadway in the cul-de-sac. Based upon documentation from the University of Connecticut pavement lab, scuff marks caused by heavy steel track equipment movement causes stress cracks that affect the integrity of the roadway and pavement. "As a result of this damage, please be aware, that the town will require you to remove and replace the full extent of damaged pavement upon future phase extension of White Tail Lane." (Emphasis added.) Defendant’s Exh. J. Tassone calculated the cost of repair to be approximately $8,000.
Both parties denied the responsibility for the scuff marks. Vinagro’s employee testified that he observed the defendant’s employees on the roadway, and the operation of the track vehicle was done solely by Goldberg’s employees. The defendant’s employee testified that he witnessed Vinagro’s crusher travel across the cul-de-sac. At this point, White Tail Lane has not been extended, and there was no evidence submitted as when and if that will take place.
II
DISCUSSION
A. Plaintiff’s Claim of Breach of Contract
The plaintiff claims damages for breach of the agreement entered into by the parties. The plaintiff asserts that on December 22, 2017, a written contract was entered into by the plaintiff and the defendant for work to be performed by the plaintiff.
As noted previously, this is an action against the defendant, Goldberg Estates, LLC, and the surety in lieu of a foreclosure of the mechanic’s lien. The claim is that the defendant breached its agreement to the plaintiff.
"The elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other, and damages." (Internal quotation marks omitted.) American Express Centurion Bank v. Head, 115 Conn.App. 10, 15-16, 971 A.2d 90 (2009). "It is a fundamental principle of contract law that the existence and terms of the contract are to be determined from the intent of the parties ... [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ... the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the [writing] ... Where the language of the [writing] is clear and unambiguous, the [writing] is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity." (Citations omitted; internal quotation marks omitted.) Auto Glass Express v. Hanover Insurance Co., 293 Conn. 218, 225-26, 975 A.2d 1266 (2009).
In examining the plain language of the contract, taking into account the supporting evidence of time slips and invoices, the court’s conclusion is that the defendant has breached the contract and is responsible for the money sought by the plaintiff. The defendant, however, insists that the written contract does not reflect the agreement of the party. The defendant argues that the e-mail sent on November 4, 2016, is intertwined and related to the contract and should be merged into a fully integrated contract setting forth all material terms. The question becomes whether the parties intended the written contract to be the final repository.
At trial, the court rejected this argument, finding that the e-mail was not relevant to the claim made by the plaintiffs. However, the court did allow the e-mail to be submitted as a full exhibit, and gave wide latitude to the defendant in presenting its argument as it relates to the special defenses and counterclaim. In addition, the court allowed the submission of the e-mail for consideration as to the defendant’s counterclaim and special defenses.
The e-mail, although parol evidence, was considered to determine the parties’ intent as to the issue of integration. See, Associated Catalog Merchandisers, Inc. v. Chagnon, 210 Conn. 734, 740-41, 557 A.2d 525 (1989).
"Whether the written contract was actually the final repository of the oral agreements and dealings between the parties depends on their intention, evidence as to which is sought in the conduct and language of the parties and the surrounding circumstances. If the evidence leads to the conclusion that the parties intended the written contracts to contain the whole agreement, evidence of oral agreements is excluded, that is, excluded from consideration in the determination of the rights and obligations of the litigants, even though it is admitted on the issue of their intention. Cohn v. Dunn, 111 Conn. 342, 346, 149 A. 851 [1930]. Shelton Yacht & Cabana Club, Inc. v. Suto, 150 Conn. 251, 254-55, 188 A.2d 493 (1963) ... (Citations omitted.) Damora v. Christ-Janer, 184 Conn. 109, 113-14, 441 A.2d 61 (1981). A written agreement is integrated and operates to exclude evidence of the alleged extrinsic negotiation if the subject matter of the latter is mentioned, covered or dealt with in the writing ... if it is not, then probably the writing was not intended to embody that element ... Cohn v. Dunn, supra, [ 111 Conn. at] 347 ; Shelton Yacht & Cabana Club, Inc. v. Suto, supra, [ 150 Conn. at] 258 ; 2 Restatement (Second), Contracts § 215; 30 Am.Jur.2d, Evidence § 1045. If the evidence, however, does not indicate that the writing is intended as an integration, i.e., a final expression of one or more terms of an agreement; 2 Restatement [supra ] § 209(1); then the agreement is said to be unintegrated, and the parol evidence rule does not apply. E. Farnsworth, Contracts, § 7.3., p. 452. Whether the parties intended to integrate their negotiations in writing is a question of fact for the court. Jarvis v. Cunliffe, 140 Conn. 297, 299, 99 A.2d 126 (1953); 2 Restatement [supra ] § 210(3)." (Internal quotation marks omitted.) Associated Catalog Merchandisers, Inc. v. Chagnon, 210 Conn. 734, 739-40, 557 A.2d 525 (1989).
One commentator has defined integration: "As a matter of substantive law, where the parties to an agreement adopt a writing as the final and complete expression of that agreement an integration results; the act of embodying those terms in the writing becomes the contract. Under such circumstances, extrinsic evidence to vary the terms of the written instrument is excluded because the writing is the contract itself." Internal quotation marks omitted.) 4 S. Williston, Contracts (3d Ed. Jaeger 1970) § 631, p. 961.
Whether a writing has been adopted as an integrated agreement is a question of fact to be determined in accordance with all relevant evidence. 2 Restatement, supra, § 209, comment (c). A written agreement complete on its face is taken to be an integrated agreement in the absence of contrary evidence. Id., § 209(3); see Associated Catalog Merchandisers, Inc. v. Chagnon, supra, 210 Conn. at 740, 557 A.2d 525. The burden is on the party attempting to prove the absence of integration. If an agreement is determined to be integrated it renders inoperative any prior inconsistent written or oral agreements. 2 Restatement, supra, § 213(1).
Whether a contract is integrated depends on the intention of the parties, "evidence as to which is sought in the conduct and language of the parties and the surrounding circumstances." (Internal quotation marks omitted.) Associated Catalog Merchandisers, Inc. v. Chagnon, supra, 210 Conn. at 739, 557 A.2d 525. The following factors are considered significant in making this evaluation: first, whether the subject matter of the alleged extrinsic negotiation "is mentioned, covered or dealt with in the writing ... if it is not, then probably the writing was not intended to embody that element"; (internal quotation marks omitted) id. at 740, 557 A.2d 525; second, whether the written agreement was skeletal in nature or detailed; id.; third, whether the writing contained a recital that it was intended to constitute the parties’ final agreement; 29A Am.Jur.2d, Evidence § 1099 (1994); and fourth, whether counsel participated in the negotiations and drafting of the agreement. Shelton Yacht & Cabana Club, Inc. v. Suto, supra, 150 Conn. at 254-55, 188 A.2d 493.
The court finds that the Crushing Services Contract is a fully integrated agreement as to the terms and conditions relating to the services to be performed by Vinagro. There is no evidence to suggest that the parties intended to make the e-mail dated November 4, 2016, a part of the contract. The Crushing Services Contract provided for the exact cost of the rates for rentals, and the various other conditions relating to the project, such as who would provide what services, and which party would be responsible for certain fees. The contract made no provision as to the length of time the project would take, or the amount of yardage that would need crushing. The terms set forth in the e-mail as to the length of time the project would take were assumptions based upon inaccurate information provided by the defendant to the plaintiff. The time period provided for preparation work was based upon Goldberg’s survey of the rock pile and his own determination that it was about 5, 000 cubic yards. Both parties agree that the yardage was approximately double that amount. The conversion rate of tons to yards is approximately 1.5. The defendant acknowledges that the tonnage was 13, 900 which would translate into approximately 9, 266 cubic yards.
Given that the actual cubic yard measurement was almost twice the amount the defendant gave to the plaintiffs, and the estimate of the cost was $76,850, the final cost of $135,636 would be reasonable.
The court finds that the defendant breached its contract with Vinagro for its failure to pay the amounts charged for the work performed.
B. Special Defenses
The defendant has raised special defenses to the plaintiff’s claim of breach of contract: fraudulent misrepresentation, (fraudulent inducement), negligent misrepresentation, equitable estoppel, and breach of covenant of good faith and fair dealing. These special defenses are predicated on the court finding that the e-mail of November 4, 2016, was a part of the agreement, or that the statements made by the plaintiff in the e-mail induced to the defendant into entering an agreement with the plaintiff for the crushing of the rocks.
One of the special defenses plead was that the plaintiff failed to credit the defendant with payments. The plaintiff has in fact given credit to the defendant for the payments it made.
"Under the common law ... it is well settled that the essential elements of fraud are: (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." (Internal quotation marks omitted.) Leonard v. Commissioner of Revenue Services, 264 Conn. 286, 296, 823 A.2d 1184 (2003). "All of these ingredients must be found to exist ... Additionally, [t]he party asserting such a cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which ... we have described as clear and satisfactory or clear, precise and unequivocal." (Internal quotation marks omitted.) Harold Cohn & Co. v. Harco International, LLC, 72 Conn.App. 43, 51, 804 A.2d 218 (2002). The burden is on the party claiming fraud to prove each of these elements by clear and convincing evidence. Duplissie v. Devino, 96 Conn.App. 673, 681, 902 A.2d 673 (2006).
There is no credible evidence to indicate that the plaintiff made a false statement which was untrue and known to be untrue, or that it was made in reckless disregard for the truth of the matter, and was made so that the defendant would act on the false statement. The defendant, Goldberg Estates, does not satisfy the civil burden of proof of "fair preponderance," let alone the higher burden of clear and convincing required for a claim of fraud.
The fourth element of fraudulent misrepresentation is that the defendant must prove that the defendant did act on the statement to its injury. This element is to be proven by a fair preponderance of the evidence. Because the defendant cannot sustain its burden as to the first three elements, the court does not consider the fourth element.
"The governing principles [of negligent misrepresentation] are set forth in similar terms in § 552 of the Restatement (Second) of Torts (1977): One 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." (Internal quotation marks omitted.) Rafalko v. University of New Haven, 129 Conn.App. 44, 52, 19 A.3d 215 (2011). "Traditionally, an action for negligent misrepresentation requires the plaintiff to establish (1) that the defendant made a misrepresentation of fact (2) that the defendant knew or should have known was false, and (3) that the plaintiff reasonably relied on the misrepresentation, and (4) suffered pecuniary harm as a result." (Internal quotation marks omitted.) Centimark Corp. v. Village Manor Associates Ltd Partnership, 113 Conn.App. 509, 518, 967 A.2d 550, cert. denied, 292 Conn. 907, 973 A.2d 103 (2009).
As the court has previously stated, the estimates given for the time to complete the crushing and the cost were based on assumptions, which assumptions were based upon estimates given by the defendant to the plaintiff. There is no credible evidence to indicate that the estimate was not made in good faith. Further there is no credible evidence to indicate that the plaintiff provided false information, or that it failed to exercise reasonable care in obtaining the information.
As to the claim of equitable estoppel, again, the defendant has not sustained its burden that a clear and definite promise was made to him, that the plaintiff should have expected the defendant to rely on the promise, and that the defendant did rely on the promise to its detriment. No promise was made to the defendant.
Lastly, as to the special defense that the plaintiff’s conduct breached the implied covenant of good faith and fair dealing within the contract, the defendant claims that Vinagro by the totality of its conduct breached the covenant of good faith within the contract.
"To constitute a breach of [the implied covenant of good faith and fair dealing], the acts by which a [plaintiff] allegedly impedes the [defendant’s] right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith." (Citations omitted; internal quotation marks omitted.) De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424, 432-33, 849 A.2d 382 (2004).
"Good faith and fair dealing means an attitude or state of mind denoting honesty of purpose and freedom from intention to defraud. It means being faithful to one’s duty and obligation under the contract ..." (Internal quotation marks omitted.) Froom Development Corp. v. Developers Realty, Inc., 114 Conn.App. 618, 628, 972 A.2d 239, cert. denied, 293 Conn. 922, 980 A.2d 909 (2009). "The definition [of good faith] requires not only honesty in fact but also observance of reasonable commercial standards of fair dealing." (Internal quotation marks omitted.) Cadle Co. v. Ginsburg, 51 Conn.App. 392, 399, 721 A.2d 1246 (1998), cert. denied, 247 Conn. 963, 724 A.2d 1125 (1999). "Whether a party has acted in bad faith is a question of fact ..." (Internal quotation marks omitted.) Landmark Investment Group, LLC v. Chung Family Realty Partnership, LLC, 125 Conn.App. 678, 693, 10 A.3d 61 (2010), cert. denied, 300 Conn. 914, 13 A.3d 110 (2011).
"Bad faith means more than mere negligence; it involves a dishonest purpose ... [B]ad faith may be overt or may consist of inaction, and it may include evasion of the spirit of the bargain ..." (Internal quotation marks omitted.) Brennan Associates v. OBGYN Specialty Group, P.C., 127 Conn.App. 746, 759-60, 15 A.3d 1044, cert. denied, 301 Conn. 917, 21 A.3d 463 (2011). "Absent allegations and evidence of a dishonest purpose or sinister motive, a claim for breach of the implied covenant of good faith and fair dealing is legally insufficient." Alexandru v. Strong, 81 Conn.App. 38, 81, 837 A.2d 875, cert. denied, 268 Conn. 906, 845 A.2d 406 (2004).
The court finds that the evidence fails to support a claim that Vinagro acted in bad faith in its duties under the Crushing Service Contract. The amounts charged to the defendant were in accordance with the agreement, and there was no credible evidence to suggest that Vinagro acted with any dishonest purpose. There is no basis for the court to find that Vinagro acted in breach of the covenant of good faith and fair dealing. The court finds the defendant has failed to meet its burden as to the special defenses.
C. Defendant’s Counterclaim
The defendant has raised a counterclaim alleging damages to the roadway, specifically an area in the cul-de-sac, as well as damages for the alleged delay in the project.
The court finds that the defendant has failed to sustain its burden as to these claims. As to the area in the cul-de-sac, there is no credible evidence to indicate how the damage to the roadway occurred. Further, the town engineer testified credibly that repairs to the roadway are only needed when and if the roadway is extended. There is no evidence before the court as to whether and when this will occur.
With regard to the claim for damages for the alleged delay in the project, the court has addressed this previously and found that the e-mail of November 4, 2016 is not a part of the contract. Therefore, the defendant’s claim for damages as a result of the alleged delay fails.
III
DAMAGES
After a review of the bills submitted, as well as the supporting documentation, the court finds that the plaintiff has proved its damages in the amount of $67,256.75.
IV
CONCLUSION
Based on the foregoing, judgment shall enter in favor of the plaintiff, J.R. Vinagro Corporation, and against the defendant, Goldberg Estates, LLC, and Hudson Insurance Company, on the complaint, as well as in favor of the counterclaim defendant, J.R. Vinagro Corporation and against the counterclaim plaintiffs, Goldberg Estates, LLC, and Hudson Insurance Company. Damages are awarded on the complaint in the amount of $67,256.75. In the exercise of its discretion, and pursuant to General Statutes § 37-3a, the court awards interest at the rate of 10 percent, which amount as of the date of this memorandum is $17,486.27, which amount shall continue to accrue thereafter until paid. In addition, after a review of the bill of costs provided to the court, the court awards costs in the amount of $1,672.85. As agreed prior to the commencement of the trial, the plaintiff shall submit its claim for attorneys fees within 15 days of this memorandum. The court shall schedule a hearing on the issue of an award of attorneys fees.
Total award as follows:
Principal sum due:
$67,256.75
Interest (3/13/17— 10/11/19):
$17,486.27
Costs:
$ 1, 672.85
Total amount due the plaintiff:
$86,415.87