Opinion
FBTCV156049465S
03-20-2017
Pro-Teck, LLC v. The Jewish Home for the Elderly of Fairfield County, Inc. et al
UNPUBLISHED OPINION
OPINION TITLE: MEMORANDUM OF DECISION ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND OBJECTION THERETO
Alfred J. Jennings, Jr., Judge Trial Referee.
This is an action by plaintiff Pro-Teck, LLC. as a subcontractor for purposes of disposal and removal of hazardous or contaminated debris and other construction and demolition services at a construction site in Bridgeport. The action was commenced as a foreclosure of mechanics' lien action against the property owner and the primary subcontractor who had hired the plaintiff. While the case was pending, by agreement of the parties, a Bond in Substitution of Mechanic's Lien was provided to the plaintiff. The surety on that bond was cited in as a defendant, and an Amended Complaint was filed stating a claim against that bond in the amount of $85, 436.38 for nonpayment for services provided by the plaintiff under its subcontract. Now before the court is the motion for summary judgment brought by defendants Federal Insurance Company (the surety on the bond) and Arena Construction Services, LLC (the primary subcontractor and the principal on the bond). The plaintiff objects to the motion for summary judgment.
" Practice Book § 17-49 provides that 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. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Sherman v. Ronco, 294 Conn. 548, 553-54, 985 A.2d 1042 (2010). " [T]he 'genuine issue' aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred . . . A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case." (Citation omitted; internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002).
In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material issue of fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45]." (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10-11, 938 A.2d 576 (2008).
Plaintiff's position in its Amended Complaint is that it was a subcontractor on the job, that it performed services under its subcontract, that it made demands for payment that were not honored, that it timely filed a mechanic's lien on the premises, that the bond stands in lieu of the mechanic's lien, and that the surety on the bond is now liable to pay for the services. In filing their motion for summary judgment the defendants' position is that defendant Arena Construction Services, LLC made to the plaintiff a periodic payment of $112, 185.82 on or about September 26, 2014 for services rendered up until August 5, 2014, and, in conjunction with that payment, received from the plaintiff a signed document entitled " Sub-Subcontractor Supplier Periodic Release and Waiver of Claims" (The " Periodic Release and Waiver") which includes a waiver by the plaintiff of payment for all work performed or materials supplied on or before August 5, 2014. A copy of the Periodic Release and Waiver as signed by William Torello as principal member of plaintiff Pro-Teck, LLC is attached as an exhibit to Defendants' Memorandum of Law in support of Motion for Summary Judgment. Plaintiff's response is twofold. First, it argues that its current claim for $85, 436.38 (admittedly for work performed prior to August 5, 2014) is excluded from or " carved out of" the waiver because, in signing the Periodic Release and Waiver he specifically wrote the $85, 436.38 on the form on the line calling for " balance due after receipt of [the $112, 185.82] payment, " and there is an ambiguity in the Periodic Release and Waiver form in that it contains waiver language for all claims for work performed before August 5, 2014 but nonetheless asks without qualification for the balance due after receipt of the periodic payment for which the waiver is sought. Secondly, plaintiff argues that the waiver contained in the Periodic Release and Waiver is void in any event under the provisions of Conn. Gen. Stat. § 42-158l entitled " Clauses waiving the right to claim against mechanic's liens or claim against a payment bond void." The court agrees with both of plaintiff's arguments. There is an ambiguity in the Periodic Release and Waiver Form which is a material issue of fact to be resolved by the trier of fact at trial, and, in any event the waiver language in that form is void and unenforceable under Conn. Gem Stat. § 42-158l(a). The court will discuss the two conclusions separately.
I. Ambiguity in the Periodic Release and Waiver
Defendants argue strenuously that there is no ambiguity in the waiver provision, but rather it is clear and unambiguous, self- explanatory, without conditions, and voluntarily signed by the principal member of the plaintiff, typical in the construction industry " designed to protect lienees who will understand what has been waived and what may be owed after plaintiff signs its release and waiver" (Def. Memorandum of Law, third page). They attach copies of Mr. Torello's deposition in which he admits that he had signed the document, but also testified " . . . but that doesn't indicate that there weren't other invoices that were due previous to that day [August 5, 2014]. Not all of the invoiced were covered. . . . Because I think I have some invoices here that weren't paid previous to that date . . . Got very confusing . . . He paid partial invoices, only a portion of one." The waiver portion of the Periodic Release and Waiver provides:
The Undersigned Sub-subcontractor . . . acknowledges receipt of the amount set forth above as payments received for the period indicated and waives and releases any claim, mechanic's lien and claim of lien which it may now have upon the land and improvements described above in the Project description, or against KBE Building Corporation, Subcontractor or the Project Owner, arising out of or relating to Sub-subcontractor's work pursuant and materials supplied up and through, the period indicated above.
A subsequent provision applies the waiver language to any claim the Sub-subcontractor may have against any paymentt bond provided on the Project.
" Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact . . . [w]here there is definitive contract language, the determination of what the parties intended by their contractual communications is a question of law . . . In giving meaning to the terms of a contract, the court should construe the agreement as a whole, and its relevant provisions are to be considered together . . . The contract must be construed to give effect to the intent of the contracting parties . . . This intent must be determined from the language of the instrument and not from any intention either of the parties may have secretly entertained . . . [I]ntent . . . is to 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 contract . . . [Where] . . . there is clear and definitive contract language. The scope and meaning of that language is not a question of fact but a question of law." (Citations omitted; internal quotation marks omitted.) Schwartz v. Family Dental Group., P.C. 106 Conn.App. 765, 771, 943 A.2d 1122, cert denied, 288 Conn. 911, 954 A.2d 184 (2008), as quoted in Milone & MacBroom, Inc. v. Winchester Estates, Superior Court, Judicial District of Litchfield, Docket No. LLI CV10-6002884S (October 25, 2011, Pickard, J.) [52 Conn.L.Rptr. 793, ].
In this case, the court's interpretation of the contractual language must be guided by two well established rules. First, this being a motion for summary judgment, the court must view the evidence in the light most favorable to the nonmoving party. Sherman v. Ronco, supra . And second, whenever two interpretations of contractual provisions seem equally possible, the provision will be construed against the party who actually drew it. Ravitch v. Stollman Poultry Farms, Inc., 165 Conn. 135, 328 A.2d 711 (1973).
There is no dispute but that the Partial Release and Waiver Form signed by the principal of the plaintiff was provided by or on behalf of the defendants. The key phrases are the sentence in the second paragraph reciting payment received from Arena Construction Services for labor or materials supplied up and through August 5, 2014 in the amount of $112, 185.82, followed by the sentence " Balance due for this project after receipt of payment is $85, 436.38, " and the reference back to those sentences in the waiver provision of the following paragraph where 'Sub-subcontractor . . . acknowledges receipt of the amount set forth above as payments received for the period indicated and waives and releases any claim, mechanic's lien and claim of lien . . . arising out of or relating to Sub-subcontractor/Supplier's work pursued and materials supplied up and through the period indicated above." Each party has given its interpretation of that language. As previously mentioned the defendants claim it is " designed to protect lienees who will understand what has been waived and what may be owed after plaintiff signs its release and waiver." The plaintiff's interpretation is set forth in Mr. Torello's affidavit of September 8, 2016 at paragraphs 7 and 8:
7. As specifically spelled out in the waiver, $85, 436.38 remained due to Pro-Teck for work it had performed but had not yet been paid.
8. I executed the waiver because it specifically acknowledged that $85, 536.38 remained due to Pro-Teck, and I relied on that carve-out to believe that Pro-Teck retained its right to security and payment for the $85, 536.38 balance.
Taking the contractual language most favorably to the plaintiff as the non-moving party, and construing it contra preferntum to the defendants as the parties who designed the form and provided it to the plaintiff for signature, and noting that the plaintiff's form calls for the $85, 436.38 nonpayment to be inserted immediately after the calls for the $112, 185.82 payment, without asking when the $85, 436.38 claim accrued, the court finds that either interpretation is possible, and there is therefore an ambiguity to be resolved as an issue of fact at trial.
Construing very similar language in a Release and Waiver form in another case, Judge Pickett in Milone & MacBroom, Inc. v. Winchester Estates, supra, Judge Pickett ruled: " The language of the waiver does not reflect a clear intention to waive the plaintiff's right to file a mechanic's lien for work it had performed but for which it had not received payment. No such intention is clearly stated. Accordingly what the parties intended is a question of fact and not law." The very same observation applies here.
The defendants have therefore failed to meet their burden as the moving party to show that there is no genuine issue of material fact which would entitle them to judgment as a matter of law.
II. Illegality of The Waiver under Conn. Gen. Stat. § 42-158l(a)
Section 42-158l(a) of our statutes provides:
(a) any provision in a construction contract or any periodic lien waiver issued pursuant to a construction contract that purports to waive or release the right of a contractor, subcontractor, or supplier to perform services, perform labor, or furnish materials under the construction contract to (1) claim a mechanic's lien, or (2) make a claim against a payment bond, for services, labor, or materials which have not yet been performed and paid for shall be void and of no effect.
In Milone & MacBroom, Inc. v. Winchester Estates, supra, Judge Pickett decided as a matter of first impression the issue: namely " whether [a] waiver is void pursuant to General Statutes § 42-158l because, at the time the plaintiff signed the waiver, it had not been paid in full for work that it had already performed." That is also the exact issue presented in this case.
Judge Pickett, in Milone & MacBroom, pointed out that Section 42-158l was enacted in 1999 as part of Public Act 99-153 entitled " An Act Concerning Fairness in Financing in the Construction Industry."
The Court followed the established rules for statutory construction, including the rule that the provisions of a remedial statute should be liberally construed in order to implement that remedial purpose. Finding that the remedial purpose of the mechanic's lien statutory scheme, as well as the particular remedial purpose of § 42-158 is the furnishing of security for a contractor's labor and materials, but not to usurp the right of a lienor to elect to waive its right to file a mechanic's lien, the MacBroom court fashioned and applied a two-part test to determine the validity of the periodic lien waiver:
In light of the remedial purpose of the statutory scheme and the plain language of the statute, General Statutes § 42-158l may reasonably be interpreted to require that already performed and paid for. Unless both conditions are met, i.e. performance and payment, the mechanic's lien waiver is void and of no effect. This interpretation is supported by case law recognizing the validity of periodic waivers of mechanic's liens where work has been performed and paid for. In Arrone Building & Remodeling, LLC v. Ksiazek, 101 Conn.App. 472, 923 A.2d 757 (2007), our Appellate Court upheld a lower court's determination that a contractor waived the right to file a mechanic's lien where the contractor signed periodic lien waivers for work performed and paid for.
In the present case, Southern Connecticut Financial does not dispute that, at the time plaintiff signed the waiver of mechanic's lien, the plaintiff had performed the work but had not been paid in full. The plaintiff concedes that he was paid three weeks later. Nonetheless, at the time the waiver was signed, the conditions necessary to make the waiver valid were not met. As such Southern Connecticut Financial has not demonstrated that there is no genuine issue of material fact that the plaintiff waived its right to file a mechanic's lien. Accordingly, Southern Connecticut Financial's motion for summary judgment must be denied for this first reason given.
III. Order
This court concurs with the reasoning and ruling of the Litchfield Superior Court in Milone & MacBroom, Inc. v. Winchester Estates, supra . For the very same reasons the defendants in this case have failed the payment prong two-part test to demonstrate the validity of the lien waiver signed by plaintiff by showing both performance of but not payment for the work described in the subject lien, and the court accordingly denies the defendants' motion for summary judgment in that they have failed to demonstrate beyond any issue of material fact their entitlement to judgment as a matter of law. The defendants' Motion for Summary Judgment is denied and the plaintiff's objection thereto is sustained.