Opinion
No. CV09-5013071S
June 24, 2009
MEMORANDUM OF DECISION
FACTS
Peter Szynkowicz, the plaintiff, applied for a prejudgment remedy after an alleged breach of a contract between him and Edward Development Company, Inc., the defendant. The plaintiff asks the court to attach the defendant's property in the amount of $24,500.00, alleging there is probable cause the principle action will succeed. A hearing on this matter was ordered, which was then continued by the court to April 28, 2009. Both parties appeared for a hearing on this date, presenting evidence and argument to the court.
The facts of the case, as alleged by both parties, are generally undisputed. The parties entered into a contract for the construction and sale of a residential dwelling at the property located at 7 Meadowbrook Drive, East Haddam, Connecticut. The plaintiff made deposits of $16,000.00. The final contract, as amended, provided that if the closing and final sale of the property did not occur by November 20, 2008, the plaintiff had the option to terminate the contract.
On November 26, 2008, the building was not complete and the plaintiff exercised his option, terminating the contract as required. It is at this point the facts diverge.
The plaintiff claims he canceled the contract because the building was not complete. He alleges that the contract's plain language allowed him to cancel the contract and this was the only reason for the cancellation.
The defendant argues that, while the building was not finished by November 20, this was because the plaintiff was not able to secure financing to purchase the building. Thus, the defendant slowed and eventually stopped construction, so as to prevent any additional losses. The defendant also argues that the building would have been complete by November 20 if the plaintiff was not delayed in his choosing of kitchen cabinets.
DISCUSSION
The defendant is entitled only to a limited review of the plaintiff's application for a prejudgment remedy, according to statute. General Statutes § 52-278d(a) provides: "The defendant shall have the right to appear and be heard at the [prejudgment remedy] hearing. The hearing shall be limited to a determination of (1) whether or not there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff, (2) whether payment of any judgment that may be rendered against the defendant is adequately secured by insurance, (3) whether the property sought to be subjected to the prejudgment remedy is exempt from execution, and (4) if the court finds that the application for the prejudgment remedy should be granted, whether the plaintiff should be required to post a bond to secure the defendant against damages that may result from the prejudgment remedy or whether the defendant should be allowed to substitute a bond for the prejudgment remedy. If the court, upon consideration of the facts before it and taking into account any defenses, counterclaims or set-offs, claims of exemption and claims of adequate insurance, finds that the plaintiff has shown probable cause that such a judgment will be rendered in the matter in the plaintiff's favor in the amount of the prejudgment remedy sought and finds that a prejudgment remedy securing the judgment should be granted, the prejudgment remedy applied for shall be granted as requested or as modified by the court. The court shall not grant the prejudgment remedy if the prejudgment remedy or application for such prejudgment remedy was dismissed or withdrawn pursuant to the provisions of section 52-278j."
"The duty of the trial court at a hearing on an application for a prejudgment remedy is limited to a determination of whether or not there is probable cause to sustain the validity of the plaintiff's claim . . . The hearing in probable cause for the issuance of a prejudgment remedy is not contemplated to be a full scale trial on the merits of the plaintiff's claim." (Citation omitted; internal quotation marks omitted.) International Harvester Credit Corp. v. Gillis, 4 Conn.App. 510, 512, 495 A.2d 295, cert. denied, 197 Conn. 808, 499 A.2d 58 (1985). In Calfee v. Usman, 224 Conn. 29, 616 A.2d 250 (1992), the Connecticut Supreme Court outlined a flexible standard for determining whether there is probable cause to issue a prejudgment remedy of attachment. Id., 37. The court referred to the probable cause standard as that which "has regularly been upheld in the criminal law context." Id., 38.
In considering an application for a prejudgment remedy, the trial court is asked to determine whether there exists probable cause to believe that the judgment will be rendered in favor of the plaintiff in a trial on the merits, considering both legal and factual issues. General Statutes § 52-278d (a); Hoke, Inc. v. Circuits, Inc., 26 Conn.App. 804, 805, 602 A.2d 1075 (1992). "The plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim." New England Land Co., Ltd. v. DeMarkey, 213 Conn. 612, 620, 569 A.2d 1098 (1990). "Civil probable cause constitutes a bona fide belief in the existence of facts essential under the law for the action and as would warrant a person of ordinary caution, prudence and judgment, under the circumstances, in advancing the action." Tyler v. Schnabel, 34 Conn.App. 216, 641 A.2d 388, aff'd, 230 Conn. 735, 646 A.2d 152 (1994). The task of the trial court is essentially one of weighing probabilities; that task requires the exercise of broad discretion. Haxhi v. Moss, 25 Conn.App. 16, 19, 591 A.2d 1275 (1991). The court, in making its determination of probable cause, does so on the basis of the facts before it. Included in those facts are those contained in the affidavit required by General Statutes § 52-278c. Lauf v. James, 33 Conn.App. 223, 227-28, 635 A.2d 300 (1993).
In ruling on a prejudgment remedy motion, the court must evaluate not only the plaintiff's claim but also any defenses raised by the defendant. Haxhi v. Moss, supra, 25 Conn.App. 20. A valid defense may defeat probable cause. Roberts v. Caton, 224 Conn. 483, 487 n. 4, 619 A.2d 844 (1993). "[A] good defense, such as infancy or the running of the statute of limitations, will be enough to show that there is no probable cause that judgment will be rendered in the matter in favor of the plaintiff." (Internal quotation marks omitted.) Augeri v. C.F. Wooding Co., 173 Conn. 426, 429, 378 A.2d 538 (1977); see also Connecticut Resources Recovery Authority v. Refuse Gardens, Inc., 43 Conn.Sup. 83, 642 A.2d 762.
In the present case, the court looks to whether there is probable cause the plaintiff will succeed in his action against the defendant. There is no question that the parties had a valid contract for the construction and sale of a house and property. Also, the plaintiff has paid the defendant $16,000.00 as a deposit on the transaction. The two main terms of the contract at issue are the cancellation provision and the mortgage contingency provision.
The cancellation provision in the contract addendum clearly stated that the plaintiff may cancel the contract if the construction is not complete by November 20, 2008. (Plaintiff's Exhibit 6.) While the contract does not contain a "time is of the essence" clause, the specificity of dates laid out in the addendum relating to cancellation dates and reductions in the purchase price for early completion express that both parties felt the contracted timeline was important and not flexible. Thus the court finds there is probable cause that the plaintiff properly canceled the contract.
"Moreover, a mortgage contingency clause is generally for the benefit of the buyer, and in this case, the clause did not provide that the plaintiff had the option to cancel the contract if the defendant did not obtain a mortgage commitment by a specific date. See Coneys v. Game, 141 App.Div.2D 795, 530 N.Y.S.2d 23 (1988)." Humphrey Place Condominium Assoc. v. Snipes, Superior Court, judicial district of New Haven, Docket No. CV 03 0476794 (March 17, 2009, Levin, J.). Though in a slight different context, the Supreme Court has found that the phrase "subject to and conditional upon [the buyers] ability to obtain" something prior to purchase is for the benefit of the buyer and cannot be used by the seller. Centerbrook Architects Planners v. Laurel Nursing Services, Inc., 224 Conn. 580, 589, 620 A.2d 127 (1993) (contingency clause involved town permits). In the present case, the defendant cannot rely on the mortgage contingency clause to escape the contract.
The other issues raised by the defendant, specifically the delays caused by the plaintiff, were considered by the court, but did not preclude a finding a probable cause. The defendant is not precluded from returning to these arguments and the court makes no comment on their merits.
"[P]rejudgment remedy proceedings pursuant to the provisions of [§ 52-278d] are not involved with the adjudication of the merits of the action brought by [a] plaintiff or with the progress or result of that adjudication. They are only concerned with whether and to what extent [that] plaintiff is entitled to have property of the defendant held in the custody of the law pending adjudication of the merits of that action." (Internal quotation marks omitted.) Hartford Accident Indemnity Co. v. Ace American Reinsurance Co., 279 Conn. 220, 230, 901 A.2d 1164 (2006). While this court in the present case makes no finding as to the plaintiff's case or defendant's defenses, the court does find that the plaintiff has established by probable cause that there is validity to this claim and a prejudgment remedy of some type should be granted.
"The trial court has the responsibility, after the adversarial evidentiary hearing, to consider not only the validity of the claim but also the amount that is being sought." Giordano v. Giordano, 39 Conn.App. 183, 206, 664 A.2d 1136 (1995). The court may evaluate whether the amount being sought is disproportionate to the plaintiff's damages. Id., 206-07. Any defenses, setoffs or counterclaims that the defendant may have been able to raise would be evaluated in the course of the court's finding of probable cause for the validity of the plaintiff's claim. See R.J.D. Trucks, Inc. v. Pierce, Superior Court, judicial district of Danbury, rocket No. CV 96 0325800 (November 19, 1996, Carroll, J.).
The defendant does have some recourse if the court is inclined to grant the plaintiff's application for a prejudgment remedy. If a prejudgment remedy is granted, the defendant may move for a stay and the court may then order the defendant post bond, with surety in an amount determined by the judge to be sufficient to indemnify the plaintiff for any damage that may result front the stay. See General Statutes § 52-278d(c). In the reverse situation, the Connecticut Supreme Court has decided that in the absence of a constitutional mandate, the decision whether to require a bond to protect the defendant property owner from erroneous deprivation of his property rights is one to be left to the trial court's discretion in choosing whether to modify the plaintiff's application for a prejudgment remedy. Sassone v. Lepore, 226 Conn. 773, 785-86, 629 A.2d 357 (1993).
ORDERS
In the present case, the court finds that the amount of the prejudgment remedy should be the amount of any deposits or expenses made by the plaintiff to the defendant. This amount is the sum of $16,000.00 in prior deposits and $8,500.00 in improvements the plaintiff paid for, as expressed in the plaintiff's affidavit, for a total of $24,500.00.
The court further finds that the defendant may post bond in the amount of $24,500.00 to avoid attachment to his property. The court does not find that the plaintiff be required to post bond to prevent erroneous deprivation. No other fees are awarded.