Opinion
No. CV 04-0083598 S
January 27, 2005
MEMORANDUM OF DECISION
Introduction
The Plaintiff, West Middle Turnpike, LLC, brings this action in six counts against the Defendant, George Hammersla. In the First Count of the Third Amended Complaint the Plaintiff claims breach of contract. The Plaintiff claims that the Defendant had listed his property at 14 West Middle Turnpike, Manchester, Connecticut for sale and had completed a residential property condition report on December 7, 2002. In the report the Defendant denied that there were any problems or leaks in the roof. The Plaintiff claims that as a result of the Defendant's representations it entered into a contract to purchase the property. On January 3, 2003 the Plaintiff provided the Defendant with a notice of unsatisfactory inspection and requested that the Defendant supply a satisfactory history of installation of any repairs and warranties of the roof. A closing on the property occurred on March 7, 2003. About one month later the Plaintiff became aware that water had leaked into the interior of one of the apartments in the property and as a result the roof was inspected. The inspection revealed that the roof was in fact in poor condition and in need of replacement. The Plaintiff claims that the Defendant breached his contract with the Plaintiff in that he misstated the condition of the roof in the Property Disclosure Report and did not disclose to the Plaintiff the true condition of the roof. In the Second Count the Plaintiff claims fraudulent misrepresentation and claims that the Defendant's misrepresentations as to the condition of the roof were knowingly and willfully made with the intent to induce the Plaintiff to purchase the property and that except for the Defendant's misrepresentations the Plaintiff would not have entered into the purchase agreement. In the Third Count the Plaintiff claims negligent misrepresentation in that the Defendant negligently misrepresented the condition of the roof. In the Fourth Count the Plaintiff claims innocent misrepresentation in that because of the Defendant's ownership of the property for some time prior to the transfer of title, the Defendant had special means of knowledge of the roof and its condition. In the Fifth Count, the Plaintiff claims a Connecticut Unfair Trade Practices Act violation in that the Defendant engaged in unfair and deceptive acts or practices prohibited by the Act. In the Sixth Count the Plaintiff claims a violation of Section 20-327(b) of the Connecticut General Statutes in that the Defendant knowingly misrepresented the condition of the roof in the statutorily mandated disclosure report. This count has been abandoned by the Plaintiff.
The Defendant appeared through counsel and filed an answer and six special defenses.
Trial on this matter was held on August 26, 2004. At that time the court heard testimony from a member of the Plaintiff, Glenn Beaulien; John McConville, the owner of Silktown Roofing; Charles Nai, a real estate inspector; Joseph St. Germaine, a tenant of the property; the Defendant, George Hammersla; and his wife, Barbara Hammersla; and received eleven exhibits. Simultaneous post-trial briefs were filed on October 15, 2004.
Findings of Facts
Certain facts alleged by the Plaintiff in the Complaint have been admitted by the Defendant. The Defendant admits that he is also known as Don Hammersla and that he was the owner of 14 West Middle Turnpike, Manchester, Connecticut, an apartment building. The Defendant had listed his property for sale and completed a Residential Property Condition Report on December 7, 2002, in which he checked "No" as to question 19 which inquires whether he had knowledge of any then known "roof leaks, problems." The Defendant admits he provided evidence of roof work to the Plaintiff. The Defendant also admits that Glenn Beaulieu assigned the contract of sale to the Plaintiff and the Plaintiff took title to and assumed possession of the property on March 7, 2003.
Based upon a preponderance of the evidence the court finds the following additional facts. Glenn Beaulieu is the owner of West Middle Turnpike Realty, LLC. He also owns a restaurant which adjoins the property at 14 West Middle Turnpike. That property is a four-family house. It has a flat roof. On December 7, 2002, the Defendant signed a Residential Property Condition Disclosure Report for the property in which he said "no" as to any roof leaks, problems. On December 13, 2002, Beaulieu also signed the report and acknowledged that any representations made in the report were not a warranty to the buyer and that it was not a substitute for inspections or other tests to determine the physical condition of the property. On that same date Beaulieu entered into a contract to buy the property. The contract provided for a home inspection and that within fifteen days the buyer would give the seller written notice of any inspection that did not meet the standards called for in the contract and if the buyer failed to do so, the seller had no responsibility or obligation concerning any condition to which the inspection provision applied. On December 28, 2002, Quali-Tech Northeast, LLC conducted an interior and exterior inspection of the property. In their report they noted: "Unable to fully observe roof covering due to snow cover. Advise obtaining history of installation and any repairs, warranties which may be in place, and `roof-walk' if snow melt permits, prior to closing on property." The report does not note any water damage to the interior of the property except for stains in the ceiling of the first floor bathroom that the tenant stated had been there for some time. The report notes that past leaks from the bathroom in the apartment above appeared to account for the stains. By Notice of Unsatisfactory Inspection dated January 2, 2003, the buyer advised the seller that: "Buyer requests that Seller remedy the following unsatisfactory condition(s) at Seller's expense prior to closing . . . Inspector was unable to inspect roof at time of inspection. Please supply satisfactory history of instulation (sic) and any repairs warranties that may be in place. Buyer request (sic) that roof be inspected prior to closing if snow melts, if unable to inspect seller to warrant that roof is in satisfactory condition." The notice further provides that: "Buyer reserves buyer's right to terminate the contract within the time period provided in the contract (as it may have been amended) if buyer and seller cannot come to a mutually satisfactory agreement concerning these conditions." In response, the Defendant provided a copy of a proposal from Wilcox Roofing Sheet Metal dated November 8, 1996 regarding certain work on the roof. The proposal indicates that it has a ten-year warranty. The Defendant represented that the work was completed in March 1997. The Plaintiff did not re-inspect the roof prior to the closing nor did the Defendant provide any warranty that the roof was in satisfactory condition. In February 2003 one of the tenants pointed out a small stain in the ceiling of his apartment to the Defendant. The Defendant thought it was dry and that the problem that caused it had been corrected. In October 2002 the Defendant had work done to repair the gutters which had been backing up. The closing on the property occurred on March 7, 2003. Shortly after the Plaintiff purchased the property, the same tenant brought to its attention water stains on the ceiling in his apartment. On April 23, 2003, Quali-Tech performed another inspection of the roof. Among their findings was that "[t]here was water ponding along the length of the rear roof edge, above the porch roof section. This edge has advanced deterioration, moisture damage and active water intrusion into the substrate roof layering and decking." They advised local repairs to or replacement of the damaged and discrepant sections of the roof. They did not conduct any inspection of the interior of the building nor did they reach any conclusion regarding the cause of the ceiling stains in the tenant's apartment. The Plaintiff did not pursue the warranty given by Wilcox nor did it accept the Defendant's offer to do so. Charles Nai, the inspector from Quali-Tech, believes that a roof installed in 1997 should last twenty to thirty years.
Discussion
The Plaintiff has the burden of proving its claims by a fair preponderance of the evidence. Preisner v. Illman, 1 Conn.App. 264, 267 (1984). The essence of the Plaintiff's claims are breach of contract and misrepresentation.
First Count — Breach of Contract
The Plaintiff claims that the Defendant breached his contract with it in that the Defendant had a contractual duty to make a full and fair disclosure of the potential problem with the roof. "`It is axiomatic that the . . . duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship . . . [E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement . . . The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term . . . In accordance with these authorities, the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing.' (Citations omitted; internal quotation marks omitted.) Macomber v. Travelers Property Casualty Corp., 261 Conn. 620, 638, CT Page 1605 804 A.2d 180 (2002). To recover for breach of the duty of good faith and fair dealing, the plaintiffs had to 'allege and prove that the defendant[s] engaged in conduct design[ed] to mislead or to deceive . . . or a neglect or refusal to fulfill some duty or some contractual obligation not prompted by an honest mistake as to one's rights or duties . . .' (Emphasis in original; internal quotation marks omitted.) Hunte v. Amica Mutual Ins. Co., 68 Conn.App. 534, 544-45, 792 A.2d 132 (2002)." Miller v. Guimaraes, 78 Conn.App. 760, 772-3 (2003). The Plaintiff claims that the Defendant breached the contract by misstating the condition of the roof in the Residential Property Condition Disclosure Report and by not disclosing the true condition of the roof. The facts do not support this claim. The Defendant knew the roof had been repaired and therefore he had no reason to believe that there were any problems with the roof that should be disclosed to the Plaintiff. Even if we assume that the stains in the tenant's apartment were new, that is, after the roof repair, there was no evidence presented as to their cause or that they were in any way linked to the condition of the roof.
The Plaintiff also claims that the Defendant represented that a new roof had been installed and such was not the case. The evidence established that the Defendant agreed to and paid for repairs to the roof. From the work proposal it can be assumed that it was for a new roof. There was no evidence that the Defendant knew or should have known that the work was not done or that it was done in an inadequate manner. Based on the same information, which had been made available to the Plaintiff, the Plaintiff believed the roof was new in 1997 so there shouldn't be any problem with it.
The evidence did not establish that the Defendant knew of any problems with the condition of the roof and failed to disclose them to the Plaintiff. The Defendant did not mislead or deceive the Plaintiff and therefore he did not breach the contract. Since the Plaintiff failed to prove its breach of contract claim the court need not consider the Defendant's special defenses to this claim.
Second Count — Fraudulent Misrepresentation
"`Fraud consists [of] deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed . . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment . . . Additionally, [t]he party asserting such a cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which higher standard we have described as clear and satisfactory or clear, precise and unequivocal.' (Citation omitted; internal quotation marks omitted.) Giulietti v. Giulietti, 65 Conn.App. 813, 836, 784 A.2d 905, cert. denied, 258 Conn. 946, 947, 788 A.2d 95, 96, 97 (2001)." Miller v. Guimaraes, 78 Conn.App. 760, 780-1 (2003). Thus the Plaintiff's burden "cannot be equated with the fair preponderance standard of proof for ordinary civil actions." (Citation omitted; internal quotation marks omitted.) Wallenta v. Moscowitz, 81 Conn.App. 213, 220 (2004). "Fraud by nondisclosure . . . involves the failure to make a full and fair disclosure of known facts connected with a matter about which a party has assumed to speak, under circumstances in which there is a duty to speak." (Citation omitted; internal quotation marks omitted.) Pospisil v. Pospisil, 59 Conn.App. 446, 450 (2000).
The Plaintiff has not met its burden as to this claim. The evidence did not establish that the Defendant knew that the roof was in poor condition and was leaking and intentionally misrepresented the condition of the roof to the Plaintiff or failed to disclose facts about the roof within his knowledge.
Third Count — Negligent Misrepresentation
"This court has long recognized liability for negligent misrepresentation. We have held that even an innocent misrepresentation of fact may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth. Richard v. A. Waldman Sons, Inc., 155 Conn. 343, 346, 232 A.2d 307 (1967); see also J. Frederick Scholes Agency v. Mitchell, 191 Conn. 353, 359, 464 A.2d 795 (1983); Johnson v. Healy, 176 Conn. 97, 102, 405 A.2d 54 (1978); Warman v. Delaney, 148 Conn. 469, 473, 172 A.2d 188 (1961); Boucher v. Valus, 6 Conn. Cir.Ct. 661, 665-66, 298 A.2d 238 (1972). The governing principles are set forth in similar terms in § 552 of the Restatement (Second) of Torts (1977): `One who, in the course of his business, profession or employment . . . supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.' See also Ultramares Corporation v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931); Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922); W. Prosser W.P. Keeton, [ supra,] § 107, p. 745. (Internal quotation marks omitted.) D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 217-18, 520 A.2d 217 (1987)." (Internal quotation marks omitted.) Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 575-6 (1995). More recently, the Appellate Court stated: "A vendor of residential property is liable to a purchaser for a negligent misrepresentation of the condition of the property to that purchaser if the purchaser would not otherwise have agreed to the terms of the sale. See Richard v. A. Waldman Sons, Inc., 155 Conn. 343, 347, 232 A.2d 307 (1967); Warman v. Delaney, 148 Conn. 469, 473-74, 172 A.2d 188 (1961); Foley v. Huntington Co., 42 Conn.App. 712, 721-22, 682 A.2d 1026, cert. denied, 239 Conn. 931, 683 A.2d 397 (1996). Accordingly, an action for negligent misrepresentation requires a plaintiff to prove that (1) the defendant made a misrepresentation and (2) the plaintiff reasonably relied upon that misrepresentation. See Citino v. Redevelopment Agency, 51 Conn.App. 262, 273-75, 721 A.2d 1197 (1998); see also Maturo v. Gerard, 196 Conn. 584, 589, 494 A.2d 1199 (1985). `Whether evidence supports a claim of . . . negligent misrepresentation is a question of fact.' (Internal quotation marks omitted.) Mips v. Becon, Inc., 70 Conn.App. 556, 558, 799 A.2d 1093 (2002)." Giametti v. Inspections, Inc., 76 Conn.App. 352, 363-4 (2003).
The Plaintiff's claim rests on the discovery of the small stain in the tenant's apartment between the date of the completion of the Residential Property Condition Disclosure Report in December and the closing in March. The evidence did not establish that the stain, described as less than the size of a golf ball, was evidence of a leak in the roof or was even caused by the condition of the roof. The Defendant believed that any conditions which might have caused the stain had been repaired. The existence of the stain alone, without more, does not establish that the Defendant knew the roof was in poor condition and failed to disclose that to the Plaintiff or that the Defendant somehow misrepresented the condition of the roof by not disclosing the stain. The Defendant therefore did not make any actionable misrepresentation regarding the roof.
Fourth Count — Innocent Misrepresentation CT Page 1608
"In Connecticut, a claim of `innocent misrepresentation . . . is based on principles of warranty, and . . . is not confined to contracts for the sale of goods.' Johnson v. Healy, 176 Conn. 97, 102, 405 A.2d 54 (1978); see also Richard v. A. Waldman Sons, Inc., 155 Conn. 343, 347, 232 A.2d 307 (1967); E.F. Construction Co. v. Stamford, 114 Conn. 250, 259-60, 158 A. 551 (1932). A person is subject to liability for an innocent misrepresentation if `in a sale, rental or exchange transaction with another, [he or she] makes a representation of a material fact for the purpose of inducing the other to act or to refrain from acting in reliance upon it . . . even though it is not made fraudulently or negligently.' 3 Restatement (Second), Torts § 552C (1977). We have held that an innocent misrepresentation is `actionable, even though there [is] no allegation of fraud or bad faith, because it [is] false and misleading, in analogy to the right of a vendee to elect to retain goods which are not as warranted, and to recover damages for the breach of warranty . . .' (Citations omitted; internal quotation marks omitted.) Johnson v. Healy, supra, at 101, 405 A.2d 54." Gibson v. Canano, 241 Conn. 725, 730 (1997).Here the evidence did not establish that the Defendant, other than in the Residential Property Condition Disclosure Report, made any representations regarding the roof. The Plaintiff now claims that statement was not false since the alleged leak occurred after the report was executed. When requested by the Plaintiff to provide evidence of repairs to the roof he submitted the proposal from Wilcox Roofing and represented only that the work described therein had been completed in March 1997. The Defendant did not provide any warranty regarding the roof even though the Plaintiff did not have it re-inspected prior to the closing. The Plaintiff points to no action, other than the failure to disclose the stain in the tenant's apartment, by the Defendant, upon which liability could rest. Yet the evidence did not establish that the stain was related to the condition of the roof. Thus the Plaintiff cannot prevail on this claim as well.
Fifth Count — CUTPA
"CUTPA provides in relevant part that `[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.' General Statutes § 42-110b(a). `Connecticut courts, when determining whether a practice violates CUTPA, will consider (1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise-whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other businessmen) . . . Thus, a violation of CUTPA may be established by showing either an actual deceptive practice . . . or a practice amounting to a violation of public policy.' (Citation omitted; internal quotation marks omitted.) Kenney v. Healey Ford-Lincoln-Mercury Inc., supra, 53 Conn.App. at 330, 730 A.2d 115. `An act or practice is deceptive if three conditions are met. First, there must be a representation, omission, or other practice likely to mislead consumers. Second, the consumers must interpret the message reasonably under the circumstances. Third, the misleading representation, omission, or practice must be material — that is, likely to affect consumer decisions or conduct.' (Internal quotation marks omitted.) Southington Savings Bank v. Rodgers, 40 Conn.App. 23, 28, 668 A.2d 733 (1995), cert. denied, 236 Conn. 908, 670 A.2d 1307 (1996). `Whether a practice is unfair and thus violates CUTPA is an issue of fact . . . On appellate review, we overturn factual determinations only when they are clearly erroneous.' (Citations omitted; internal quotation marks omitted.) Calandro v. Allstate Ins. Co., 63 Conn.App. 602, 615, 778 A.2d 212 (2001). Moreover, `[a] failure to disclose can be deceptive only if, in light of all the circumstances, there is a duty to disclose . . . Regarding the duty to disclose, the general rule is that . . . silence . . . cannot give rise to an action . . . to set aside the transaction as fraudulent . . . A duty to disclose will be imposed, however, on a party insofar as he voluntarily makes disclosure. A party who assumes to speak must make a full and fair disclosure as to the matters about which he assumes to speak.' (Citations omitted; internal quotation marks omitted.) Macomber v. Travelers Property Casualty Corp., supra, 261 Conn. at 635-36, 804 A.2d 180." Miller v. Guimaraes, 78 Conn.App. 760, 775-6 (2003).
The Defendant did not advise the Plaintiff that the roof was in good repair or make any warranty to this effect as the Plaintiff requested. The Defendant did not mislead the Plaintiff. The Plaintiff was free to conduct another inspection of the roof prior to the closing but chose not to do so. Consequently the Plaintiff's CUTPA claim must fail.
Conclusion
Judgment shall enter for the Defendant on all counts of the Third Amended Complaint.
Jane S. Scholl, J.