Opinion
FSTCV106005729S.
11-28-2012
SEAN O'KANE AIA ARCHITECT, P.C. v. Goran PULJIC et al.
Alan Spirer, Westport, for Sean O'kane Aia Architect, P.C.
UNPUBLISHED OPINION
Alan Spirer, Westport, for Sean O'kane Aia Architect, P.C.
KEVIN TIERNEY, Judge Trial Referee.
This court, based on the parties' stipulation, has bifurcated the trial. The only issues before this court are the viability of the Special Defenses of the statute of limitations and laches.
The operative complaint is the Amended Complaint dated October 5, 2011 (# 109.00). It is in two counts; breach of contract and unjust enrichment. The plaintiff is seeking money damages for architectural services provided by the plaintiff for construction and restoration of the defendant's home in Darien, Connecticut. Both parties are named as defendants in each of the two counts. The amount of unpaid architectural services claimed is $92,201.35. To this Amended Complaint the defendants filed an Amended Answer, Special Defenses, Set off and Counterclaim dated April 20, 2012 (# 133.00). The Second Special Defense addressed to the breach of contract count states: " The right of action for the cause stated in the First Count of the Second Amended Complaint did not accrue within six years next before the commencement of this action. This action is therefore barred under Connecticut General Statutes § 52-576." The Third Special Defense addressed to the unjust enrichment count states: " The right of action for the cause stated in the Second Count of the Second Amended Complaint did not accrue within six years next before the commencement of this action. This action is therefore barred under Connecticut General Statutes § 52-276." The Fourth Special Defense to the unjust enrichment count states: " The doctrine of laches precludes Plaintiff from recovering upon the cause of action stated in the Second Count of the Second Amended Complaint." To the two Special Defenses alleging the statute of limitations, Gen.Stat. § 52-576, the plaintiff filed a Matter in Avoidance of Special Defense dated January 19, 2012 (# 117.00). That Matter in Avoidance stated: " 1. As alleged by the Defendants and admitted by the Plaintiff in Defendants' Counterclaim ‘ Plaintiff and Defendants were aware that the potential existed for each of them to bring claims against the other related to the project.’ 2. As alleged by the Defendants and admitted by the Plaintiff in Defendants' Counterclaim ‘ Plaintiff and Defendants agreed that they would not bring claims against one another related to the project until the litigation between the Defendants and their contractor was resolved.’ 3. Upon information and belief, the litigation between the Defendants and their contractor was not resolved until sometime in 1995. 4. Accordingly, the commencement of any period of limitations as alleged by the Defendants has been tolled." This Matter in Avoidance only addressed the two Special Defenses of statute of limitations. The court assumes that the plaintiff meant 2005 in paragraph 3. The court will disregard this typographical error. The court will refer to this agreement pled in avoidance as a stand still agreement.
In addition to the above three Special Defenses, the defendants filed other Special Defenses, a set-off, and a two-count counterclaim. The plaintiff filed Special Defenses and setoffs to those counterclaims. The pleadings were closed on February 28, 2012 (# 126.00).
At the beginning of the trial, the parties submitted a written Stipulation Re Adjudication dated May 1, 2012 (# 142.00). " WHEREAS, the Defendants have asserted special defenses based on the statute of limitations (First Count) and the doctrine of laches (Second Count) (hereinafter ‘ the Special Defenses'), in addition to other special defenses that are unrelated to the issues to be adjudicated." " WHEREAS, the parties have agreed to bifurcate the trial to enable an adjudication of the facts and issues relating to the Special Defenses before an adjudication of the other facts and issues in the case." The parties stipulated that the trial may be bifurcated for the purposes of adjudicating the facts and issues relating to the above mentioned three Special Defenses before any adjudication of other facts and issues. Further terms and conditions were set forth in the Stipulation, which depended upon this court's decision as to the above three Special Defenses.
" No action for an account, or on any simple or implied contract, or on any contract in writing, shall be brought but within six years after the right of action accrues, except as provided in subsection (b) of this section." Gen.Stat. § 52-576(a). Both parties agree that the contract is in writing, is an executed contract, and that Gen.Stat. § 52-576(a) is the appropriate statute of limitations that could apply to this lawsuit. " The Defendants contend that the statute of limitations began to run when the Plaintiff rendered Invoice No. 23 in February 2003. However, the Plaintiff's responsibilities and services pursuant to the Agreement and the Construction Contract continued well into 2005." Plaintiff's Post-Trial Brief, # 144.00, page 10.
" Laches occurs when neglect or omission to assert a right taken in conjunction with lapse of time and other circumstances, causes prejudice to an adverse party so as to operate as a bar to relief in equity ... Laches consists of two elements. First, there must have been a delay that was inexcusable, and, second, that delay must have prejudiced the defendant ... The mere lapse of time does not constitute laches." Traggis v. Shawmut Bank of Connecticut, N.A., 72 Conn.App. 251, 262, 805 A.2d 105 (2002). " Laches is purely an equitable doctrine, is largely governed by the circumstances, and is not to be imputed to one who has brought an action at law within the statutory period." State v. Lombardo Brothers Mason Contractors, Inc., 302 Conn. 412-17, fn. 3 (2012); A. Sangivanni & Sons v. F.M. Floryan & Co., 158 Conn. 467-74, 262 A.2d 159 (1969). The plaintiff is seeking to recover in the Second Count on unjust enrichment. Since unjust enrichment is an equitable doctrine, the equitable defense of laches is an appropriate equitable defense. Crown Linen Service, Inc. v. Apple East of Danbury, Inc., Superior Court, judicial district of Hartford at Hartford, Docket No. CV 07-5011649 (April 15, 2008, Rittenband, J.T.R.).
The First Count alleges breach of contract, which is an action at law. A breach of contract is not an equitable action and the court therefore is not at liberty to weigh the equities in an action at law for breach of contract. Laches is not an appropriate defense to breach of contract and it has not been raised as a special defense to the First Count for breach of contract. Florian v. Lenge, 91 Conn.App. 268, 282-83, 880 A.2d 985 (2005); Seramonte Associates v. Smith, Superior Court, judicial district of New Haven at New Haven, Housing Session, Docket No. CVNH 9706-8247 (January 21, 2008, Levin, J.); Delfini v. Clark, Superior Court, judicial district of New Haven at Meriden, Docket No. CV 06-5001367 S (February 5, 2010, Burke, J.).
There is a split of authority among the Superior Court judges as to whether or not the statute of limitations, Gen.Stat. § 52-576, is applicable to the equitable claim of unjust enrichment. " Unjust enrichment and quantum merit claims are most analogous to contract claims and are subject to the six-year statute of limitations as well." Bourbeau v. Alph Q, Inc., Superior Court, judicial district of Hartford, at Hartford, Complex Litigation Docket No. X03 CV 05-4015076 (May 20, 2008, Langenbach, J.); Generation Partners, LP v. Mandell, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. FST CV 09-5010537 S (July 22, 2011, Jennings, J.T.R.). " There is no Connecticut appellate authority that squarely addresses which is the appropriate statute of limitations" for claims of unjust enrichment. Corbett v. Petrillo, Superior Court, judicial district of New Haven at New Haven, Docket Number CV 06-5005440 S (February 29, 2008, Skolnick, J .T.R.).
This court believes that the better analysis is to treat breach of contract cases as subject to the statute of limitations, Gen.Stat. § 52-576, and treat the equitable remedy of unjust enrichment as being subject only to the time limitations of laches. " In an equitable proceeding, a court may provide a remedy even though the governing statute of limitations has expired, just as it has discretion to dismiss for laches an action initiated within the period of the statute." Rossman v. Morasco, 115 Conn.App. 234, 256, 974 A.2d 1 (2009); Dunham v. Dunham, 204 Conn. 303, 326-27, 528 A.2d 1123 (1987).
Any issue as to whether the proper plaintiff is Sean O'Kane individually, Sean O'Kane Architect AIA or Sean O'Kane, AIA Architect, PC is not relevant to either the statute of limitations or laches defenses, which are the only two issues before this court in the bifurcated proceeding.
The court finds the following facts and legal conclusions.
The plaintiff and the defendant, Melinda Puljic, executed a contract dated November 11, 2000 for the architectural services. Ex. 1, Ex. 19, Admission 1. and 2. The contract was addressed to both defendants, " Mr. & Mrs. G. Puljic." Both defendants were the owners of the Darien house on which the addition, restoration and alteration work was to be performed. Both defendants paid the plaintiff for earlier architectural services. The contract required the plaintiff to provide the following services for the " PROJECT": " Proposed architectural design, construction drawings and consultation for proposed additions and alterations to the existing Puljic residence located at 8 Searles Road in Darien, Connecticut." The essential project was the restoration of two adjacent houses built almost 200 years ago improved with additions and alterations joining the two older houses into one building. The defendant, Melinda Puljic, signed the architectural contract on December 1, 2000. In the summer of 2001 the contractor, E.M. Rose, was hired and later commenced the work. Both defendants signed the E.M. Rose building contract on October 10, 2001. Ex. 5, Ex. 6. The building contract is also referred to as the construction contract. They are one and the same. Ex. 5, Ex. 6. The plaintiff was not a party to the building contract and no one on behalf of the plaintiff signed the building contract. The goal of the project was to complete the house by December 2002.
The plaintiff submitted 23 separate invoices to the defendants for architectural services. Ex. 2. The first invoice is dated January 8, 2001 covering the months of October, November and December 2001. Ex. 2, Ex. 3. Invoices 18 through 23 have not been paid. Those unpaid invoices total $92,201.35, which is plaintiff's current damage claim for both counts of breach of contract and unjust enrichment. All invoices were addressed to and billed to both defendants. Invoices 1 through 17 were paid. Invoice 17 was dated July 29, 2002, covered the month of June 2002, and was in the amount of $25,501.50. Invoice 17 was paid in full on November 1, 2002. This was the last invoice paid. The six unpaid invoices 18 through 23 cover billings for the six-month period of July 2002 through and including December 2002. Almost all the invoices cover one calendar month. There were no invoices submitted in evidence for architectural services rendered after December 31, 2002. There was no testimony that any invoice was prepared for architectural services that occurred after December 31, 2002. This lawsuit was commenced by a June 24, 2010 complaint in two counts; breach of contract and unjust enrichment. The return date was July 20, 2010. The defendants were served at their abode in Darien, Connecticut on June 29, 2010. See Return of Service in the file.
The court finds that there is no statute of limitations to the equitable remedy of unjust enrichment. The court finds the issues for the plaintiff on the Third Special Defense to the unjust enrichment claim contained in the plaintiff's Second Count.
Gen.Stat. § 52-576(a) is the six-year statute of limitations for breach of contract. Since the defendants were served on June 29, 2010, to be within the statute, the services and/or duties that were rendered by the plaintiff must have been performed after June 29, 2004. The last invoice prepared by the plaintiff and sent to the defendants was February 3, 2003 covering architectural services through December 31, 2002. Ex. 2, Invoice 23. There was no evidence of any architectural services being rendered by the plaintiff after the last invoice billing February 2, 2003. Based on the above two dates this court concludes that the statute of limitations, Gen.Stat. § 52-576(a), is a bar to the First Count of breach of contract unless the plaintiff can prove tolling by a fair preponderance of the evidence.
The only Matter of Avoidance filed by the plaintiff is set forth on page 2 of this Memorandum of Decision in four numbered paragraphs. It alleges that there was an express acknowledgment by the defendants that litigation between the defendants and E.M. Rose, the contractor, would commence, that the plaintiff as the project architect would be utilized as a witness in the defendants' defense of the contractor's claims against the defendants and on the defendants' counterclaim against the contractor, and during that period of time the claims for the unpaid architectural services of $92,201.35 would be held in abeyance. If the plaintiff can sustain its burden of proof by a fair preponderance of the evidence, then Gen.Stat. § 52-576 would be tolled.
" A general acknowledgment of an indebtedness may be sufficient to remove the bar of the statute. The governing principle is this: The determination of whether a sufficient acknowledgment has been made depends upon proof that the defendant has by an express or implied recognition of the debt voluntarily renounced the protection of the statute ... But an implication of a promise to pay cannot arise if it appears that although the debt was directly acknowledged, this acknowledgment, was accompanied by expressions which showed that the defendant did not intend to pay it, and did not intend to deprive himself of the right to rely on the Statute of Limitations ... [A] general acknowledgment may be inferred from acquiescence as well as from silence, as where the existence of the debt has been asserted in the debtor's presence and he did not contradict the assertion." Cadle Co. v. Errato, 71 Conn.App. 447, 461-62, 802 A.2d 887 (2002).
The court after hearing all the evidence and reviewing the case law, the court finds that the last payment that the defendants made to the plaintiff was on November 1, 2002 on Invoice 17. Ex. 2, Ex. 3. No further payments were made by the defendants or by anyone else on behalf of the defendants to the plaintiff. There were no payments made within the six years of the June 29, 2010 service of this lawsuit. There is no written evidence that the defendants promised to pay the plaintiff during that six-year period of time. There was no written acknowledgment of any debt by the defendants to the plaintiff during that six-year period of time. The parties had an in person conversation in either January or February 2003. In that conservation Goran Puljic told Sean O'Kane that " he paid enough already." In a January 22, 2003 e-mail, Goran Puljic informed the plaintiff that: " I don't think we need anything from you right now." The court finds it was reasonable for the parties to assume from these statements that there was going to be no further payment by the defendants to the plaintiff after February 2003 and that the unpaid invoices 18 through 23 were not going to be paid by the defendants.
Sean O'Kane recalled that Goran Puljic told him in January 2003. " I feel like I paid you enough already, " and he testified that these words meant that I will pay you later. The court finds that this interpretation by Sean O'Kane not credible.
There was no evidence that either defendant spoke to Sean O'Kane at any time after an email exchange on February 9-10, 2003. There was no written communication between the parties after February 10, 2003. Ex. 13. The only writing after February 10, 2003 was a demand letter written by plaintiff on June 8, 2010 just before the commencement of this lawsuit on June 29, 2010. Ex. 14. Attached to the one-page June 8, 2010 letter were copies of the six unpaid invoices. Ex. 14. No further bills were sent by the plaintiff to the defendants after invoice 23 on February 3, 2003. During the over seven years from February 2003 to June 2010, the plaintiff never asked the defendants, either in writing or in any personal conversation, to pay any money until the June 8, 2010 demand letter just before the commencement of this lawsuit on June 29, 2010. There is no evidence that the plaintiff went to the project site after December 31, 2002. On cross examination in this trial, Sean O'Kane admitted that he did not contact the defendants in any fashion from 2003 until his June 8, 2010 letter. Ex. 14. Throughout the project, the plaintiff did not participate in either the review or payment of the contractor bills. The contractor, E.M. Rose, submitted bills directly to the defendants for payment.
The plaintiff wrote this June 8, 2010 letter to the defendants when Sean O'Kane saw photographs of the Puljic house and an article in a design magazine in late spring of 2010. Ex. 14. The magazine article was not a full exhibit in this trial. Ex. 15, 1D. The court concludes from the testimony that Sean O'Kane first saw the magazine in May or June 2010. The plaintiff admitted: " Sean O'Kane saw the article and remembered the Defendant's outstanding invoice." Plaintiff's Post-Trial Brief, # 144.00, page 9. The plaintiff may have hired counsel by that time. The letter was sent by certified mail on June 9, 2010. The defendants did not respond. That lack of response seven years after the last invoice is not evidence of tolling. It is not evidence that the defendants no longer were denying that they owed the plaintiff any money for architectural services.
The Puljics never hired another architect. They never designated another architect. Goran Puljic testified that the defendants did not need an architect after the end of 2002. There was no evidence produced that the defendants used the services of any other architect or that any architectural design, drawings or plans were prepared for the project after the end of 2002.
On April 8, 2003, Sean O'Kane, the owner and architect in charge of the plaintiff, met with the defendants' counsel of record, Garcia and Milas, at the lawyers' office for a review of the entire project. On December 2, 2004 and December 3, 2004, Garcia and Milas came to the plaintiff's office to examine files and records. E.M. Rose, the contractor, had commenced arbitration against the defendants. Garcia and Milas represented the defendants in that arbitration. E .M. Rose Builders, Inc. designated and called Sean O'Kane to be its witness in the arbitration. Neither the defendants nor their attorneys, Garcia and Milas, called Sean O'Kane as their witness in the arbitration. The April 8, 2003, December 2, 2004 and December 3, 2004 meetings between Garcia and Milas and Sean O'Kane was for the preparation of an arbitration witness, not the rendering of any architectural services. There was no evidence that the plaintiff or Sean O'Kane billed the defendants and/or their attorneys for the arbitration preparation. There was no evidence that the plaintiff or Sean O'Kane was paid by the defendants and/or their attorneys for the arbitration preparation.
Sean O'Kane testified at the arbitration proceeding for the contractor, E.M. Rose, on April 27, 2005 and June 6, 2005 in Hartford, Connecticut. Sean O'Kane was a witness called by E.M. Rose in order to collect money from the defendants and to defeat the defendants' counterclaim against E.M. Rose. E.M. Rose was successful in the arbitration. There was no evidence that the plaintiff or Sean O'Kane was hired by the defendants and/or their attorneys for these two arbitration appearances nor was there any evidence that the defendants and/or Garcia and Milas were ever billed. Ex. 9. (The March 26, 2003 date in Ex. 9 is incorrect.)
Sixteen pages of plaintiff's architectural plans were submitted to the Darien Building Department by E.M. Rose, the contractor, in 2001 to get a building permit. Ex. 11. The dates on these plans ranged from May 18, 2001 to October 5, 2001 with most plans dated May 18, 2001. The plaintiff wrote a letter to the Darien Building Department in regards to the measured height of the residence and cupola on October 9, 2001. Ex. 10. That letter made no mention of a certificate of occupancy (C.O.). So too the plaintiff wrote a July 25, 2002 letter to the Darien Building Department that made no mention of a C.O. Ex. 33. Only the contractor and the owners requested a C.O. in writing. Ex. 66. The Darien Building Department issued a temporary C.O. in 2002.
On September 28, 2005 the Darien Building Department issued a final C.O. for the Darien house. Ex. 12. The plaintiff wrote no letters nor conferred with anybody about the issuance of the 2005 C.O. In 2005 Goran Puljic was the contractor of record and he alone obtained the 2005 C.O. The plaintiff was not requested to write such a letter. The C.O. form does not require the architect's signature. Ex. 12. The C.O. form has no space for the architect's signature. Although the plaintiff was nominally the architect of record on the project in 2005, there is no evidence that the plaintiff performed any activities or services in obtaining the final C.O. The plaintiffs claim that the final C.O. was issued while he was the architect of record and the final C.O. was based on architectural plans long since on file with the Darien Building Department is not evidence of any architectural services performed by the plaintiff in 2005. The last drawings prepared by the plaintiff was the design of a wall. The plaintiff could not recall if that wall design occurred in December 2002 or March 2003.
The arbitration was finally resolved in E.M. Rose's favor in January 2007. There was no evidence that the plaintiff performed any architectural services for the defendants during the entire arbitration proceedings, or the court proceedings related to the arbitration. The plaintiffs claim that the arbitration was resolved in 2007 while he was the architect of record, is not evidence of any architectural services or duties performed by the plaintiff. Even if there was a standstill agreement, the six-year statute of limitations still had two years to run as of the completion of the arbitration in January 2007. The plaintiff still did not commence suit against the defendants and waited another three and one-half years.
The plaintiff did not sign the building contract. Ex. 5. There was no place for the plaintiff or architect to sign. Ex. 5, page 14. The building contract was signed by E.M. Rose Builders, Inc. as the Contractor and Goran Puljic and Melinda Puljic as the Owner. Ex. 5, page 14, Ex. 6. The plaintiff was not a party to the building contract. The plaintiff as a corporation was not mentioned in the building contract nor in the addendum to the building contract. Neither the building contract nor the addendum identified the architect as Sean O'Kane, AIA individually. The building contract was an AIA form. The AIA standard form of agreement between Owner and Contractor contained certain duties to be performed by the architect. Ex. 5, A201, Article 4. The court finds that the plaintiff, not being a party or signator to the building contract, is not bound by the building contract and cannot enforce the terms of the building contract. The architectural services and duties that were to be performed by the plaintiff for the defendants are those listed on the front page of the two-page architectural service contract. Ex. 1. The architectural services listed in the building contract are not part of the architectural services and duties the defendants required of the plaintiff.
Sean O'Kane was shown a copy of the defendant's Counterclaim (# 110.00) and directed to read paragraphs 3 and 4 that contained allegations of the standstill agreement. He was then asked if he agreed with these allegations. He answered; Yes. That essentially was the extent of Sean O'Kane's testimony on this explicit agreement not to litigate until the E.M. Rose arbitration concluded. No written evidence was offered to support this claim. The e-mail exchange of February 9 and 10, 2003 does not support this standstill agreement. Ex. 13. The e-mail exchange between Sean O'Kane and E.M. Rose from December 2002 does not support this standstill agreement. Ex. 47. The defendants have not admitted the existence of that standstill agreement in trial testimony. There is no credible evidence in this trial that such a standstill agreement was reached except for the claim that the defendants' pleadings are judicial admissions. In addition, the substantial delay between the conclusion of the arbitration and the commencement of this litigation would belie such a standstill agreement. The arbitration ended in 2007. In the ensuing three years until June 2010, the plaintiff did nothing to collect on the outstanding $92,210.35. It sent no bills. The parties did not communicate with each other, either by mail, e-mail, telephone, fax, texting or in person. The plaintiff sent no reminder invoices to the defendants in those three years. This evidence speaks loudly that there was no standstill agreement.
In its rebuttal case, Sean O'Kane testified in cross examination that he exchanged e-mails with E.M. Rose in December 2002. Ex. 43. In these e-mails the contractor was very critical of the plaintiff's performance by stating " You should be ashamed" and " You led the lamb to slaughter." In response Sean O'Kane testified before this court that he had e-mails written by him to E.M. Rose in response to this criticism. No such e-mails were produced in this trial. Sean O'Kane stated that " I am sure I can find them." No request to open the evidence to produce these e-mails was made by the plaintiff.
The SCOPE OF WORK to be performed by the plaintiff in the November 2000 contract did not require the architect to obtain and assist in obtaining a Certificate of Occupancy. Ex. 1, On cross examination, Sean O'Kane was asked a separate question as to each of the elements of the SCOPE OF WORK contained near the top of the first page of the parties' contract. Ex. 1. To each question, he admitted that he did that work and completed that work all before December 31, 2002. He admitted that all of the plaintiff's visits to the project site occurred before December 31, 2002.
The parties' contract does not require the defendants to furnish a specific notification of termination to the plaintiff or visa versa. Ex. 1. The contract states that if the defendants fail to thereafter perform, the defendants still have to pay for architectural services executed prior to the termination. " TERMINATION. This agreement may be terminated by the Client or Architect should the other party fail to perform his obligations herein. In the event of termination, the Client shall pay the Architect for all services and reimbursable expenses executed prior to the termination. The Client has the express right to terminate this agreement without obligation within three (3) business days of the date of signing, upon which the retainer will be promptly returned in full. Termination of this contract beyond this period will result in a 50% retention." Ex. 1, page 2. The plaintiff drafted this agreement and chose the language of this TERMINATION clause. The court finds that the January/February 2003 statement by Goran Puljic to Sean O'Kane that " I have paid you enough, " coupled with the language of the January 22, 2003 e-mail " I don't think we need anything from you right now" are clear and unequivocal declarations by the defendants of the termination of the contract for architectural services. Any claimed architectural services rendered by the plaintiff after February 3, 2003 were not rendered pursuant to the contract.
Sean O'Kane claims that he first knew that the defendants were not going to pay him the unpaid invoices during the E.M. Rose arbitration in testimony on April 25, 2005. This testimony is not credible. This is so because in October 2003 the plaintiff prepared a summary of the invoices. Ex. 3. The plaintiff did not send this summary or a request for payment to the defendants. Surely the plaintiff knew in October 2003 that the defendants were not going to pay the outstanding invoices. The plaintiff prepared this summary in October 2003 in lieu of commencing suit against the defendants at the plaintiff's peril that the six-year statute of limitations had begun to run.
On cross examination in this trial, Sean O'Kane admitted that he testified in the E.M. Rose arbitration that he did not perform any architectural services beyond the end of 2002 except for some small efforts in 2003. Both these dates are beyond the statute of limitations. Since Sean O'Kane made these admissions under cross examination in this trial, it was not necessary that the transcripts of his E.M. Rose arbitration testimony to the same extent be offered in evidence in this trial. The plaintiff is bound by Sean O'Kane's above admissions.
On March 26, 2003 the defendants' attorneys, Garcia and Milas, requesting that the plaintiff send notification to E.M. Rose that the contract was terminated. Ex. 5, Article 4.2.2, Ex. 7. Although the plaintiff did not sign, was not required to sign, and was not a party to the building contract, that building contract contained a provision for the contractor, E.M. Rose, to be terminated from the project by written certification from the architect. Article 14 of the building contract stated: " Certification by the architect that sufficient cause exists to justify such action." The first Garcia and Milas request was by the March 26, 2003 letter. Ex. 7. The second request by Garcia and Milas was misdated but was sent shortly after April 2003. Ex. 9. The plaintiff did not send any such certification letter. Essentially the plaintiff ignored the provision of the building contract addressed to the architect. Ex. 8. This failure to act is evidence that in March and April 2003 the plaintiff knew he was no longer the architect on this project and his services had been terminated by the defendants. Neither Garcia and Milas letter requested the plaintiff to perform any architectural services required by the November 2000 contract. Ex. 1.
The plaintiff testified that he did not know when E.M. Rose left the job. E.M. Rose left the job in December 2002. Ex. 7, Ex. 47. The plaintiff did not know when Goran Puljic became the contractor of record. This is strong evidence that as of February 2003, the plaintiff knew it was no longer the architect on this project and the defendants were not going to pay the unpaid invoices.
The following language of the December 24, 2002 to January 22, 2003 e-mail exchange between the parties is not evidence of a stand still agreement: " I don't think we need anything further from you right now." Ex. 47, January 22, 2003 e-mail Goran Puljic to Sean O'Kane.
Goran Puljic testified that he never made an agreement with the plaintiff to hold off suing each other until the E.M. Rose arbitration was completed. He denies stating to Sean O'Kane " after I deal with Rose we will then resolve any differences we may have." The court finds these statements by Goran Puljic credible. In contrast the court finds Sean O'Kane's testimony on the standstill agreement vague and not specific. The court finds Sean O'Kane's testimony on the standstill agreement not credible.
The court finds that the plaintiff has failed to sustain its burden of proof of tolling by reason of an agreement between the parties to the effect that no claims will be brought against one another related to the project until the litigation between the defendants and E.M. Rose, the contractor, was resolved. The plaintiff has failed to sustain its burden of proof of tolling of the statute of limitations, Gen.Stat. § 52-576(a), as to the First Count of breach of contract. The court finds the issues for the defendants on their Second Special Defense addressed to the First Count of breach of contract.
The plaintiff argues that the six-year statute of limitation, Gen.Stat. § 52-576, was tolled by the continuance course of conduct doctrine.
[w]hen the wrong sued upon consists of a continuing course of conduct, the statute does not begin to run until that course of conduct is completed ... [I]n order [t]o support a finding of a continuing course of conduct that may toll the statute of limitations there must be evidence of the breach of a duty that remained in existence after commission of the original wrong related thereto. That duty must not have terminated prior to commencement of the period allowed for bringing an action for such wrong ... Where [our Supreme Court has] upheld a finding that a duty continued to exist after the cessation of the act or omission relied upon, there has been evidence of either a special relationship between the parties giving rise to such a continuing duty or some later wrongful conduct of a defendant related to the prior act ... Thus, there must be a determination that a duty existed and then a subsequent determination of whether that duty is continuing. (Citation omitted; internal quotation marks omitted.) Stuart v. Snyder, 125 Conn.App. 506, 510-11, 8 A.3d 1126 (2010).Lee v. Brenner, Saltzman & Wallman, LLP, 128 Conn.App. 250, 257 (2011).
The plaintiff only pled tolling of the statute of limitations by reason of a standstill agreement (# 133.00). Statutes of limitation are ordinarily raised by way of special defense. Forbes v. Ballaro, 31 Conn.App. 235, 239, 624 A.2d 389 (1993). This special defense then gives the plaintiff the opportunity to reply affirmatively to the statute of limitation claim by filing in avoidance. O'Conner v. Waterbury, 69 Conn. 206, 210, 37 A. 499 (1897). The plaintiff's Matter in Avoidance is silent on the elements of a continuing course of conduct. " Matters in avoidance of affirmative allegations in an answer or counterclaim shall be specifically pleaded in the reply." P.B. § 10-57 Motion in Avoidance of Answer. The court can refuse to consider the plaintiff's claim of continuing course of conduct since the plaintiff did not reply to the statute of limitations special defense by pleading any affirmative allegations. Beckenstein Enterprises Prestige v. Keller, 115 Conn.App. 680, 689, 974 A.2d 764 (2009); Bellemare v. Wachovia Mortgage Corporation, 94 Conn.App. 593, 607, 894 A.2d 335 (2006); Arteaga v. Waterford, Superior Court, judicial district of Hartford at Hartford, Complex Litigation Docket No. HHD X07 CV 5014477 S (March 16, 2010, Berger, J.) [ 49 Conn. L. Rptr. 787]. The plaintiff first raised the continuing course of conduct avoidance to the statute of limitation Special Defense at trial and it was first presented to this court in writing by the Plaintiff's Post-Trial Brief, # 144.00, page 10.
Regardless of the failure to plead in avoidance, the court will discuss the elements of the continuing course of conduct as a tolling defense to the statute of limitation. Although the elements of the doctrine are couched in tort terms, it is applicable to defending a statute of limitation defense in a breach of contract case. Whitney v. J.M. Scott Associates, Inc., Superior Court, judicial district of Litchfield at Litchfield, Docket Number LLI CV 09-5007099 S (October 10, 2012, Roche, J.). In this breach of contract claim, the plaintiff has demonstrated the first element, that the defendant committed a wrong upon the plaintiff by not paying invoices 17 through 23 in the amount of $92,201.35. The plaintiff must then prove that there was evidence of a breach of duty that remained in existence after the " commission of the original wrong related thereto." Haas v. Haas, 137 Conn.App. 424, 433 (2012). The nonpayment of a debt is a single event. It occurred when the February 3, 2003 invoice was sent for $92,201.35 and that invoice was not paid. No further invoices were sent that increased the claim in excess of $92,201.35. No invoices for the $92,201.35 were sent by the plaintiff to the defendants after February 3, 2003 until the June 8, 2010 demand letter sent by plaintiff just prior to the commencement of this lawsuit. The plaintiff has failed to prove the second element.
The third element requires that a duty continued to exist after the cessation of the act or omission relied on. This element must be accompanied by proof of either a " special relationship between the parties giving rise to such a continuing duty or same later wrongful conduct of a defendant related to the prior act." Fiichera v. Mine Hill Corporation, 207 Conn. 204, 210, 541 A.2d 472 (1988). Non-payment is non-payment. The event of non-payment is complete when the first nonpayment occurs. Handler v. Remington Arms, Co., 144 Conn. 316, 321, 130 A.2d 793 (1957). There is no legal authority furnished to this court that a continued non-payment of a debt by the due date amounts to a continuing course of conduct. If that were so, there never could be the invocation of the statue of limitation in contract collection lawsuits. In addition, the relationship of the parties were client and architect. This is not a fiduciary relationship, family relationship or any other special relationship. Stuart v. Snyder, supra, 125 Conn.App. at 506, 511 (2010). There is no evidence that the defendants committed any wrongful conduct toward the plaintiff after they refused to pay the February 3, 2003 invoices. The plaintiff has failed to prove the third element.
The court finds the issues on tolling by reason of a continuing course of conduct in favor of the defendants.
The plaintiff argues that the standstill agreement has been judicially admitted by the defendants in their Answer and Special Defenses to Second Amended Complaint dated October 20, 2011 (# 111.00). Ex. 18 In their counterclaim entitled Second Count— Equitable Estoppel (# 111.00), the defendants, by their counsel, alleged, " 3. Plaintiff and Defendants were aware that the potential existed for each of them to bring claims against the other related to the Project. 4. Plaintiff and Defendants agreed that they would not bring claims against one another related to the Project until after the litigation between Defendants and their contractor was resolved." The defendants filed this pleading claiming equitable estoppel to the possible statute of limitation defense the plaintiff could raise to the defendants' monetary claims for excess architectural fees and other damages in defendants' counterclaim.
" The admission of the truth of an allegation [in a] pleading is a judicial admission conclusive on the pleader." Jones Destruction, Inc. v. Upjohn, 161 Conn. 191, 199, 286 A.2d 308 (1971). " An admission in a pleading dispenses with proof, and is equivalent to proof." (Citation omitted.) Patchen v. Delohery Hat Co., 82 Conn. 592, 594, 74 A. 881 (1909).
Statements made in withdrawn or superseded pleadings, while not binding as judicial admissions, may be considered as evidential admissions by the party making them, just as any extrajudicial statements would be. Dreier v. Upjohn Co., 196 Conn. 242, 244, 492 A.2d 164 (1985); Nationwide Mutual Ins. Co. v. Allen, 83 Conn.App. 526, 542, 850 A.2d 1047, cert. denied, 271 Conn. 907, 859 A.2d 562 (2004); see also Auth v. Wesley, Superior Court, judicial district of Hartford at Hartford, Docket No. CV 01-0806612 (March 15, 2007, Wiese, J.) 43 Conn. L. Rptr. 67. Given that such statements have some probative value, we believe that the circumstances under which they are made, as with any other " admission, " go to the weight to be accorded the statements rather than their admissibility. Stitham v. LeWare, 134 Conn. 681, 684, 60 A.2d 658 (1948). Such admissions can be explained to the trier when the superseded pleading is admitted at trial. Kucza v. Stone, 155 Conn. 194, 197-98, 230 A.2d 559 (1967).
The defendants withdrew pleading # 111.00. Therefore, these statements are only evidential admissions that can be explained at trial. At trial, the plaintiff offered no credible evidence of such a standstill agreement and the defendant credibly consistently denied such a standstill agreement. This evidentiary admission standing by itself is insufficient proof of a standstill agreement.
In the operative Amended Answer, Special Defenses, Set off, and Counterclaim dated April 20, 2012 (# 133.00), the defendants restated the same three Special Defenses at issue herein. Ex. 18. They increased the counterclaims against the plaintiff from two to six. The last count of the counterclaim is labeled " Sixth Count Avoidance of Statute of Limitation Defense." This is not a counterclaim. It is found in the counterclaim portion of the Amended Answer but it anticipates the plaintiff's filing special defenses to the other counts of the defendants' counterclaim. This pleading is in violation of our rules of practice. P.B. § 10-57 requires that matters in avoidance be filed in reply to special defenses. Unless the statute that creates an action contains a statute of limitation, the proper pleading to a special defense alleging statutes of limitation is the filing of a Matter in Avoidance. Thus the defendants attempted to do in the guise of a Sixth Count to a counterclaim, what Connecticut practice does not permit; anticipatory pleadings.
Although the pleadings as to the Special Defenses at issue in this bifurcated hearing are closed, the plaintiff has yet to answer the five Counterclaims in # 133.00. The only responsive pleading filed by the plaintiff after # 133.00 was a general denial to all the Special Defenses dated April 23, 2012 (# 134.00). The plaintiff has not filed any Special Defenses to the new five-count Counterclaim # 133.00. Thereafter the Matter in Avoidance, now labeled Sixth Count, is not properly before the court. Beckenstein Enterprises Prestige Park, LLC v. Keller, supra, 115 Conn.App. at 688, 974 A.2d 764. Courts have held that such claims of tolling are not properly before the court. Franco v. Mediplex Construction, Inc., Superior Court, judicial district of New Haven at New Haven, Docket No. CV 96-390458 S (August 25, 2000, Owens, J.). It is not proper to anticipate a defense in the initial complaint, Darlow v. Day, Berry & Howard, Superior Court, judicial district of Hartford at Hartford, Docket No. CV 97-0575509 S (March, 4, 1999, Peck, J.).
This court cannot find that the Sixth Count is a judicial admission.
In its Post-Trial Brief dated August 1, 2012 (# 144.00), the plaintiff raises for the first time a third tolling theory of equitable estoppel. That tolling theory is not contained in the plaintiff's Matter in Avoidance (# 117.00) or any other of the plaintiff's pleadings or court filings. The plaintiff argues: " As a result of the agreement to hold their dispute with the Plaintiff in abeyance until the Rose matter was concluded, the Defendants are equitably estopped from asserting the defense of the statute of limitations." For three reasons, this equitable estoppel argument is rejected by this court: (1) equitable estoppel was not affirmatively pled as a Matter in Avoidance; (2) the plaintiff has failed to prove a standstill agreement; and (3) the elements of equitable estoppel have not been proven by the plaintiff.
" To save the 1975 contract from the statute of limitations, the plaintiffs invoke the equitable principle of estoppel. ‘ There are two essential elements to an estoppel— the party must do or say something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief; and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done ... Estoppel rests on the misleading conduct of one party to the prejudice of the other.’ " McNeil v. Riccio, 45 Conn.App. 466, 471-72, 696 A.2d 1050 (1997). Even if the plaintiff is found credible as to the existence of the standstill agreement, a fact this court has not found, the arbitration testimony concluded in June 2005. The arbitration decision was rendered by the arbitrator some time thereafter. The parties then litigated the arbitration decision in court. The entire arbitration proceedings concluded in January 2007. The plaintiff, if it believed in the standstill agreement, was free to sue the defendants in June 2005 or at least in January 2007. Yet the plaintiff waited over three and one-half years before commencing litigation. The plaintiff did not contact the defendants in any fashion until the plaintiff's June 8, 2010 letter. This silence and non-action demonstrates that the plaintiff failed to prove the reliance, change of position and/or prejudice elements of equitable estoppel.
The court now turns to the issue of whether or not the plaintiff's Special Defense of laches prevents this litigation from continuing as to the Second Count of unjust enrichment. " The defense of laches does not apply unless there is an unreasonable, inexcusable, and prejudicial delay in bringing suit ... Delay alone is not sufficient to bar a right." Cummings v. Tripp, 204 Conn. 67, 88, 527 A.2d 230 (1987). The plaintiff sued both defendants for unjust enrichment. It is noted that only the defendant, Melinda Puljic, signed the contract. Ex. 1.
" The defense of laches, if proven, bars a plaintiff from seeking equitable relief in a case in which there has been an inexcusable delay that has prejudiced the defendant. First, there must have been a delay that was inexcusable, and, second, that delay must have prejudiced the defendant." Tinaco Plaza, LLC v. Freebob's, Inc., 74 Conn.App. 760, 776, 814 A.2d 403 (2003); John H. Kolb & Sons v. G & L Excavating, 76 Conn.App. 599, 612-13, 821 A.2d 774 (2003). This court has already found that the statute of limitations, Gen.Stat. § 52-576, is not applicable as a Special Defense to unjust enrichment. It is only applicable to the First Count of breach of contract. The only Special Defense that would be applicable to Second Count of unjust enrichment is laches. Caminis v. Troy, 112 Conn.App. 516, 552 (2009). The plaintiff's Matter in Avoidance dated January 19, 2012 (Pleading # 117.00) only addresses the issue of tolling as to the Second Special Defense to the First Count and the Third Special Defense to the Second Count, both of which allege the statute of limitations, Gen.Stat. § 52-576. The plaintiff has not pled in avoidance the Special Defense of laches. The special defense of laches must be proven by the defendants by a preponderance of the evidence. The burden of proof is on the defendants to prove laches.
The mere passage of time is insufficient by itself to prove laches, but the passage of time is relevant since delay is one of the elements. Cummings v. Tripp, 204 Conn. 67, 88, 527 A.2d 230 (1981). In this case, the credible evidence shows that the last architectural services and duties that were performed by the plaintiff for the defendants relating to the Darien house was in late 2002. Seven and one-half years later the plaintiff commenced this lawsuit seeking over $92,000 damages. The plaintiff amended its complaint in order to seek a monthly service charge of 1.50% on the unpaid balance as additional damages. The operative complaint claims the 1.50% monthly service charge as damages. The contract attached to the writ, summons and complaint is dated November 11, 2000. Ex. 1. The 1.50% monthly service charge is contained in the second page of this contract under the heading of BILLING AND PAYMENTS. The entire paragraph states: " Invoices for services shall be submitted monthly and are due upon receipt and are past due fifteen (15) days after the invoice date. Accounts unpaid after this date shall be subject to a monthly service charge of 1.50% on the unpaid balance." The last bill rendered was dated February 3, 2003 and was for architectural services that ended on December 31, 2002. Ex. 2, last page, Ex. 3. The last six invoices, invoices 18 through 23, have remained unpaid. Ex. 3. They total $92,201.35. 1.50% per month, 18.0% annual interest, on $92,201.35 is $16,596.24 per year. According to the plaintiff's Amended Complaint, a 1.50% monthly service charge is due each and every month on the $92,201.35 in addition to the unpaid $92,201.35. Assuming that the 1.50% monthly service charge would commence on February 3, 2003, the date of the last unpaid invoice, the plaintiff is claiming 18.0% annual interest for 9 years, 9 months and 26 days. This would amount to an additional $163,011.94 as monthly service charges. For over seven of those years, the plaintiff did not demand any monies of the defendants, send any bills to the defendants, or correspond or speak to the defendants about the payment on the unpaid $92,201.35. The defendants are now facing a monetary claim in excess of $255,213.29 that increases $46.10 every day. The court finds that the defendants have been prejudiced by the delay, a delay that far exceeds the breach of contract six-year statute of limitations.
The court finds that the Fourth Special Defense of laches addressed to the Second Count of unjust enrichment has been proven by the defendants by a fair preponderance of the evidence. Both the elements of delay and prejudice have been proven. The defendants have proven its Second Special Defense of statute of limitations, Gen.Stat. § 52-576, addressed to the First Count of breach of contract. The plaintiff has failed to sustain its burden of proof of tolling as alleged in its Matter of Avoidance addressed to the statute of limitations. The plaintiff has failed to allege and prove its avoidance of the statute of limitations based on a continuing course of conduct and equitable estoppel.
Judgment on the two counts of the plaintiff's October 5, 2011 Amended Complaint (# 109.00) enters for the defendants.
" The trial may be bifurcated for the purposes of adjudicating the facts and issues relating to the Special Defenses, before an adjudicating of the other facts and issues in the case." Stipulation Re Adjudication dated May 1, 2012 (# 142.00). Since the issues on the two Special Defenses addressed to both counts of the plaintiff's October 5, 2011 Amended Complaint (# 109.00) have been presented to this court, a decision has been rendered by this court on the bifurcated proceedings, and judgment has been rendered in favor of the defendants on the plaintiff's October 5, 2011 Amended Complaint, Paragraph 2 of the May 1, 2012 Stipulation Re Adjudication is now before the court for a resolution; " In the event that a final judgment (after all appeals are exhausted) enters in favor of the Defendants as a result of the foregoing adjudication the Defendants will withdraw all counterclaims asserted against the Plaintiff." (# 142.00).