Opinion
Nos. CV00-0161320 S, CV00-0161321 S, CV02-0170455 S
March 15, 2004
MEMORANDUM OF DECISION
This consolidated action incorporates three complaints concerning various roof repair projects. New England Masonry Company (New England), the roofers, initially filed two claims in small claims court which TKM Associates, LLC (TKM), the alleged property owner/manager and defendant, subsequently transferred to the superior court in September 2000. The two amended complaints allege breach of contract, quantum meruit and unjust enrichment for TKM's failure to pay for roofing repairs performed at 185-203 Broad Street, 1571 and 1581 Boston Post Road, and 111 River Street in Milford. In response, TKM filed a number of special defenses, among which it denied property ownership of 185-203 Broad Street and denied receiving any consideration or benefit for New England's repairs. On November 29, 2002, the Greenview Terrace Condominium Association (GTCA) filed an amended complaint against New England, alleging breach of contract, negligence and unjust enrichment for New England's failure to properly fix a roof leak at 203 Broad Street. New England filed a counterclaim alleging unjust enrichment for GTCA's failure to pay New England for its repair work.
After the December 5, 2003 bench trial, the parties entered partial stipulations of fact which include the following. TKM is the owner of the properties on 1571 Boston Post Road, 1581 Boston Post Road and 111 River Street. The total value of the work performed by New England on those properties is $2494.93. The Greenview Terrace Condominium Complex consists of two separate buildings, one at 185-87 Broad Street and one at 203 Broad Street. GTCA is the owner of the common areas at 185-87 Broad Street.
Based on the testimony and evidence admitted at trial, the court finds the following facts. TKM functions as GTCA's property manager and trustee with respect to the 185-203 Broad Street properties. Among its duties, TKM arranges repairs, writes checks and accepts payments on behalf of GTCA. TKM is authorized to write checks for GTCA but must obtain permission for amounts above $1000. On the checks issued for GTCA, TKM represents itself as "TKM Associates/Greenview Terrace Association, Inc., Trustee."
In 1997, TKM contacted New England concerning leaks in its condominium roof at 203 Broad Street. New England performed some minor patchwork on the roof with the understanding that it would only guarantee the quality of their patches, not its ability to find the source of the leak. After the initial patchwork by New England failed to stop the leak, GTCA contracted with New England to prepare a large modified patch over part of the roof in May 1997. The written contract was signed by an employee of New England and Ronald Orlando, president of the GTCA. In the contract, New England promised to "flash all curbs, walls, drains and vent pipes per manufacturer's specifications." The leaks continued after the installation of the first patch, causing water damage to the interior condominiums and the residents' personal property.
New England and GTCA contracted for a second patch over the remainder of the roof on December 5, 1997. The presidents of New England and GTCA signed the second contract and its provisions contained the same promise regarding flashing. GTCA negotiated a one-year guarantee for the initial patch and a two-year guarantee on the second patch. Again, the guarantees covered New England's workmanship and materials only. GTCA paid New England more than $16,000 for both contracts as well as the initial patches.
The second large patch also failed to stop the leak. On January 9, 1998, TKM called New England back to remedy the problem on the basis of their guarantee. New England tested the masonry wall on top of the roof and informed TKM that water seeping through the masonry wall was causing the leak. New England installed tarps over the masonry wall, which temporarily stopped the leak because the tarps happened to cover the leaking area. New England charged GTCA for the testing and tarps since New England's workmanship did not cause the leak. GTCA refused to pay New England for the testing and tarps. Inclement weather eventually shredded the tarps.
When the tarps shredded due to the wind, the leak continued. TKM and GTCA made a number of efforts to stop it with no success. In June 1998, they hired Orlando Construction to waterproof the masonry walls. Other attempts by Bradley's Landscaping to caulk the area were also unsuccessful. In January 2000, Paul Casey Sons, Inc. (Paul Casey) placed new tarps over portions of the wall. The second set of tarps also failed because it did not cover the ultimate source of the leak.
Paul Casey recommended using an infrared scan, conducted in August 2000, to determine the leakage point. On the basis of this scan and some earlier testing, Paul Casey pinpointed the source at a corner where the roof met the masonry wall, an area within New England's first patch. Because this corner was not flashed to the wall, water was able to travel down the wall and underneath the roof. Paul Casey repaired this corner in October 2000 and the leak stopped permanently.
During this period, New England also worked on other properties involving TKM and GTCA. New England performed repair services at 185 Broad Street, 1571 Boston Post Road, 1581 Boston Post Road and 111 River Street valued at $2,494.93. Except for the work at 1581 Boston Post Road, GTCA withheld payment for these services, even though the services were performed adequately, because of the ongoing dispute with New England over the roof at 203 Broad Street. With respect to 1581 Boston Post Road, TKM refused to pay $318.00 because they believed New England did not patch a roof seam that TKM believes caused further leaking.
In addition, there is an unpaid joint bill for services that New England performed at 187 and 203 Broad Street totaling $1,996.14. Based on the work descriptions attached to the bill, the court allocates $601.13 to 187 Broad Street and $1,395.01 to 203 Broad Street. TKM does not contend that New England's work at 187 Broad Street was deficient. TKM believed that the entire bill was for 203 Broad Street and withheld payment because of the ongoing dispute.
Law
"[I]n an ordinary civil action the party upon whom rests the burden of proof as to a fact or issue has sustained that burden if the evidence, considered fairly, induces in the trier's mind a reasonable belief that it is more probable than otherwise that the fact or issue is true." Cruz v. Drezek, 175 Conn. 230, 235-36 (1978). "The general rule in breach of contract cases is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as that which he would have been in had the contract been performed . . . The Restatement (Second) of Contracts divides a defendant's recovery into two components: (1) direct damages, composed of the loss in value to him of the other party's performance caused by its failure or deficiency . . . plus, (2) any other loss, including incidental or consequential loss, caused by the breach . . . Traditionally, consequential damages include any loss that may fairly and reasonably be considered [as] arising naturally, i.e., according to the usual course of things, from such breach of contract itself." (Citations omitted; internal quotation marks omitted.) Ambrogio v. Beaver Road Associates, 267 Conn. 148, 155, 836 A.2d 1183 (2003).
"[U]njust enrichment and quantum meruit are doctrines allowing damages for restitution; that is, the restoration to a party of money, services or goods of which he or she was deprived that benefitted another . . . Quantum meruit is usually a remedy based on implied contract and usually relates to the benefit of work, labor or services received . . . whereas unjust enrichment relates to a benefit of money or property . . ." (Citations omitted.) United Coastal Industries, Inc. v. Clearheart Construction Co., 71 Conn. App. 506, 512, 802 A.2d 901 (2002).
"[T]he three elements required to show the existence of an agency relationship include: (1) a manifestation by the principal that the agent will act for him; (2) acceptance by the agent of the undertaking; and (3) an understanding between the parties that the principal will be in control of the undertaking." (Internal quotation marks omitted.) McDermott v. Calvary Baptist Church, 263 Conn. 378, 384, 819 A.2d 795 (2003). "The existence of an agency relationship is a question of fact." Beckenstein v. Potter Carrier, Inc., 191 Conn. 120, 133, 464 A.2d 6 (1983). "[A] principal is generally liable for the authorized acts of his agent . . ." (Citation omitted; internal. quotation marks omitted.) Rich-Taubman Associates v. Commissioner of Revenue Services, 236 Conn. 613, 619, 674 A.2d 805 (1996). "To avoid personal liability, an agent must disclose to the party with whom he deals both the fact that he is acting in a representative capacity and the identity of the principal." Id. "[U]nless otherwise agreed, a person making or purporting to make a contract with another as agent for a disclosed principal does not become a party to the contract." (Internal quotation marks omitted.) Id.
"Prejudgment interest pursuant to § 37-3a has been applied to breach of contract claims for liquidated damages, namely, where a party claims that a specified sum under the terms of a contract, or a sum to be determined by the terms of the contract, owed to that party has been detained by another party . . . [T]he determination of whether interest pursuant to § 37-3a should be awarded is a question for the trier of fact . . . It is clear that Connecticut case law establishes that prejudgment interest is to be awarded if, in the discretion of the trier of fact, equitable considerations deem that it is warranted . . . Prejudgment interest in accordance with § 37-3a normally is awarded for money wrongfully withheld, and provides for interest on money that is detained after it becomes due and payable." (Citations omitted; internal quotation marks omitted.) Ceci Bros., Inc. v. Five Twenty-One Corp., 81 Conn. App. 419, 427, 840 A.2d 578 (2004).
"The common law rule in Connecticut, also known as the American Rule, is that attorneys fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception." (Internal quotation marks omitted.) Ames v. Commissioner of Motor Vehicles, 267 Conn. 524, 532, 839 A.2d 1250 (2004). "General Statutes § 52-251a provides that `[w]henever the plaintiff prevails in a small claims matter which was transferred to the regular docket in the superior court on the motion of the defendant, the court may allow to the plaintiff his costs, together with reasonable attorneys fees to be taxed by the court.'" Burns v. Bennett, 220 Conn. 162, 168-69, 595 A.2d 877 (1991).
DISCUSSION New England v. TKM A. 185-203 Broad Street
As stipulated by the parties, GTCA is the owner of the common areas at 185-203 Broad Street: New England contends that TKM is liable for the $1395.01 in roofing services on the basis of its agency relationship with GTCA. There is no question that TKM meets the three requirements of agency with respect to 185-203 Broad Street. McDermott v. Calvary Baptist Church, supra, 263 Conn. 384. With the understanding of both companies, TKM served as GTCA's property manager. GTCA exercised control of TKM's responsibilities and had the ultimate authority for approving all major financial obligations.
Nevertheless, agents purporting to make a contract with a third party do not become parties to the contract if they disclose their principal. Rich-Taubman Associates v. Commissioner of Revenue Services, supra, 236 Conn. 619. In this case, GTCA's principal status is disclosed on the 203 Broad Street contracts by Orlando's signature as president of GTCA. GTCA is not only disclosed, but is a party to the contract. Also, checks mailed on GTCA's behalf disclosed that TKM was the trustee for GTCA. This disclosure also applies to 185-87 Broad Street. Though technically different addresses, they are part of the same condominium complex as 203 Broad Street. New England's agency theory, therefore, does not confer contractual liability on TKM with respect to these properties.
New England's equitable claims fail as well. Since TKM did not own the roofs on either of the two properties, it did not receive any benefit from the roof repairs. As a result, TKM did not acquire any benefit for which New England should be compensated. United Coastal Industries v. Clearheart Construction Co., supra, 71 Conn. App. 512-13.
B. 1571 1581 Boston Post Road, 111 River Street in Milford
The Boston Post Road and River Street properties are owned by subsidiaries of TKM Associates, TKM-OP, LLC and TKMRS, LLC. TKM Associates contracted with New England on various occasions for roof repairs, though the subsidiaries were the ultimate beneficiaries. Though the subsidiaries were the legal owners, TKM Associates acted as their agent. TKM Associates handled the finances for the subsidiaries. Oriental Furniture, the tenant at 1581 Boston Post Road, which is owned by TKM-OP, wrote its checks to TKM Associates. Moreover, the corporate members of TKMRS and TKM Associates are identical. Tina Denapoles, New England's contact with TKM, is a member of all three organizations. Her letter to New England's attorney about all the disputed properties is printed on TKM Associates' letterhead.
"To avoid personal liability, an agent must disclose to the party with whom he deals both the fact that he is acting in a representative capacity and the identity of the principal." Rich-Taubman Associates v. Commissioner of Revenue Services, supra, 236 Conn. 619. Richard Mancinone, New England's president, testified that Tina Denapoles never mentioned the subsidiaries to New England. His testimony is supported by the fact that New England directed its invoices for all the properties to TKM Associates. Therefore, TKM Associates retains liability for its contracts on behalf of its subsidiaries.
For 1581 Boston Post Road, TKM withheld payment because the leak continued after New England performed and TKM later discovered the source to be an unrepaired seam in the roof that New England had missed. Nevertheless, TKM contracted with New England to patch the roof on a trial-and-error basis, not to find the source of the leak. New England told TKM that it would only guarantee the quality and workmanship of the patches it made. Since the leak was ultimately in an area that New England had not patched, TKM breached its contract by refusing to pay.
For 1571 Boston Post Road and 111 River Street, TKM admits that New England performed properly but withheld payment due to the dispute over the Broad Street property. TKM's failure to pay under these circumstances is a breach of contract. In total, the court finds that TKM is liable for $2417.66, which includes $909.32 in prejudgment interest on the 1571 Boston Post Road and 111 River Street properties for payments "wrongfully withheld." Ceci Bros., Inc. v. Five Twenty-One Corp., supra, 81 Conn. App. 427. Though the court has the discretion to award attorneys fees in this situation, Burns v. Bennett, supra, 220 Conn. 162, 168-69, it declines to do so.
GTCA v. New England A. 203 Broad Street
GTCA's claims for breach of contract and equitable remedies involve the two roof patches which New England installed at 203 Broad Street. In the terms of the two contracts involving the roof patches, New England specifically promises to flash all walls. Despite New England's claim that the masonry walls were the source of the leak, GTCA ultimately discovered that the roof continued to leak due to a corner of the roof that was not flashed to the masonry wall. When the corner was flashed, the leaking stopped. If New England performed the flashing on the first patch instead of attributing the leak to the masonry wall, GTCA would not have needed the second patch, it would not have suffered further water damage and it would not have incurred additional expenses relating to the masonry wall. The court finds that New England's failure to flash the wall on the first patch is a breach of contract for which it is liable for direct damages and consequential damages totaling $16138.51.
B. 185-87 Broad Street
For 187 Broad Street, the dispute involves a joint bill for work completed at 187 and 203 Broad Street, though the work for each address was performed under separate agreements. Though the invoice originally submitted to TKM for payment did not itemize the charges allotted to each job, the amount: attributable to 187 Broad Street is $601.13. TKM did not pay New England because GTCA believed the bill was entirely for 203 Broad Street, a job which it believed New England failed to perform. The property manager testified that there were no problems with New England's work at 187 Broad Street. GTCA also refused to pay New England $986.60 for roof repairs at 185 Broad Street. GTCA's property manager testified that New England's work was adequate but admits that GTCA deliberately withheld the money due to the ongoing dispute over the 203 Broad Street contract.
"[A] principal is generally liable for the authorized acts of his agent . . ." (Citation omitted; internal quotation marks omitted.) Rich-Taubman Associates v. Commissioner of Revenue Services, supra, 236 Conn. 619. GTCA authorized TKM not to pay the bills for 185-87 Broad Street and is therefore liable. For both properties, GTCA received the benefit of New England's work and its nonpayment was a detriment to New England. United Coastal Industries, Inc. v. Clearheart Construction Co., supra, 71 Conn. App. 512-13. Therefore, the court awards New England $1,592.20 for GTCA's unjust enrichment and $1,194.19 in prejudgment interest for wrongfully withholding payment for a total of $2,781.92.
CONCLUSION
For the foregoing reasons, the court orders TKM to pay $2,417.66 to New England and orders New England to pay $13,356.59 to GTCA. The court need not reach the other issues raised by the parties.
Alvord, J.