Banks Bldg. v. Malanga Family, 27822.

• Decision Date: 03 July 2007
• Docket Number: No. 27822.,27822.
• Citation: 926 A.2d 1,102 Conn.App. 231
• Court: Connecticut Court of Appeals
• Parties: BANKS BUILDING COMPANY, LLC v. MALANGA FAMILY REAL ESTATE HOLDING, LLC.

926 A.2d 1

102 Conn.App. 231

BANKS BUILDING COMPANY, LLC v. MALANGA FAMILY REAL ESTATE HOLDING, LLC.

No. 27822.

Appellate Court of Connecticut.

Argued March 23, 2007.

Decided July 3, 2007.

Michael T. McCormack, Hartford, for the appellant (defendant).

Steven M. Basche, Manchester, for the appellee (plaintiff).

BISHOP, GRUENDEL and LAVINE, Js.

BISHOP, J.

This case concerns a construction contract dispute. The matter was referred to an attorney fact finder, who filed a report, on the basis of which the trial court subsequently rendered judgment in favor of the plaintiff, Banks Building Company, LLC. The defendant, Malanga Family Real Estate Holding, LLC, claims on appeal that the judgment was premised on an erroneous conclusion by the court that the defendant had waived a provision of the contract.¹ We affirm the judgment of the trial court.

The following facts and procedural history are relevant to our discussion of the issues on appeal. In August, 2002, the plaintiff began to construct the "outer shell" of a building for the defendant pursuant to an oral agreement. Subsequent to a dispute regarding the demolition of another building, the parties, on September 3, 2002, entered into a formal written contract with supplementary conditions,² pursuant to which the plaintiff agreed to construct the shell of a building³ in the Gateway Shopping Plaza in Manchester for the defendant in exchange for $93,360. The contract imposed a deadline of September 13, 2002, for completion of construction and included a time is of the essence clause regarding this date. The defendant made one progress payment to the plaintiff in the amount of $46,680 on September 6, 2002, in satisfaction of its obligation under the contract. Final payment was due under the terms of the contract "within one (1) day of completion of the [w]ork ...."

The construction of the building's shell, however, was not completed by September 13, 2002. The plaintiff sent its final invoice for $46,680 on October 23, 2002, the date it claimed to have completed its performance of the contract.⁴ The defendant, in turn, refused to pay the invoice on the ground that the plaintiff had not completed its performance obligation by September 13, 2002. Therefore, the defendant claimed, it was relieved of its obligation to pay the plaintiff because the project was not completed by the contract completion date.

Subsequently, as a result of the defendant's failure to pay the remaining amount purportedly due,⁵ the plaintiff filed a two count complaint, alleging breach of contract and, alternatively, unjust enrichment.⁶ The defendant filed an answer, three special defenses and a counterclaim, alleging that the plaintiff had materially breached the parties' contract, thereby excusing the defendant's performance. In a previous appeal of this matter involving a different issue, this court set forth the matter's procedural history as follows: "Because the amount in dispute was less than $50,000, the court referred the matter to an attorney fact finder.... The fact finder held a hearing on February 2 and 9, 2004, and, on April 12, 2004, filed a report outlining his findings of fact and recommended disposition.... The fact finder made a number of subordinate findings, including that the defendant through its actions had waived a provision of the contract stating that `time is of the essence,' and that the defendant was entitled to certain offsets from the amount due to the plaintiff under the contract. [He concluded that] judgment [should enter] in favor of the plaintiff in the amount of $22,336.80 [and against the defendant on its counterclaim.]" (Citations omitted.) Banks Building Co. v. Malanga Family Real Estate Holding, LLC, 92 Conn.App. 394, 395-96, 885 A.2d 204 (2005).

On the basis of the attorney fact finder's report, the court, Hon. Mary R. Hennessey, judge trial referee, issued a memorandum of decision adopting the fact finder's recommendation and rendering judgment in favor of the plaintiff.⁷ The court concluded that "[s]ufficient evidence was presented to support the fact finder's conclusion that the defendant waived the `time is of the essence' requirement in the contract. The fact finder concluded that `[t]here were delays on the project, but the parties adopted a course of dealings where the defendant completed some of the construction items that were the plaintiff's responsibility under the contract. The defendant waived reliance on the time is of the essence provision of the contract by its actions.'" This appeal followed.

We begin our analysis of the defendant's claim on appeal by setting forth the applicable standard of review. "Attorney fact finders are empowered to hear and decide issues of fact on contract actions pending in the Superior Court .... On appeal, [o]ur function ... is not to examine the record to see if the trier of fact could have reached a contrary conclusion.... Rather, it is the function of this court to determine whether the decision of the trial court is clearly erroneous.... This involves a two part function: where the legal conclusions of the court are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts set out in the memorandum of decision; where the factual basis of the court's decision is challenged we must determine whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous." (Citation omitted; internal quotation marks omitted.) Premier Capital, Inc. v. Grossman, 68 Conn. App. 51, 57, 789 A.2d 565, cert. denied, 260 Conn. 917, 797 A.2d 514 (2002), aff'd after remand, 82 Conn.App. 390, 845 A.2d 442, cert. denied, 271 Conn. 901, 859 A.2d 564 (2004). With the foregoing in mind, we now turn to the defendant's specific claim.

At the heart of this appeal is the defendant's claim that the court improperly found that it had waived the time is of the essence clause in the parties' written contract. On the basis of this determination, the court found that the plaintiff had not breached the contract and, accordingly, awarded damages to the plaintiff for the work it performed pursuant to the contract. The defendant argues that the court's finding that the defendant implicitly waived the time is of the essence provision in the contract was not supported by the evidence at trial and, thus, was clearly erroneous.⁸ We are unpersuaded.

The record reveals that the plaintiff continued construction work after the original September 13, 2002 deadline on matters that were its contractual responsibility. The defendant's agent testified that "[t]hey were still working on the building sometime—probably by mid-September, but after September 13, they were still working on the building." The record also supports the court's conclusion that the parties modified their original agreement concerning the allocation of work to be performed under the contract. For example, the court found that after the plaintiff had difficulty locating a contractor to complete the stairs in the building, originally the plaintiff's responsibility, the parties agreed that the defendant could use a contractor it had located to complete the stairs. Accordingly, the court found that "[the defendant] went ahead and hired P & M Ceiling & Textures to put in the stairs at a cost of $2200. The defendant maintains that this was after September 13, 2002." Moreover, the record reveals that although the original contract required the plaintiff to install a fire suppression system, the defendant worked with Northeast Fire Prevention, one of the plaintiff's subcontractors, to do this work with the plaintiff's implied consent. Additionally, following an inspection by the town of Manchester on September 11, 2002, in which certain work was found to be nonconforming, the parties agreed to remedy the nonconformity with an arrangement calling for the plaintiff to provide the materials and the defendant to provide the labor.

Finally, there was uncontroverted testimony that the defendant did not notify the plaintiff at any time that it was in breach of the contract or that the defendant intended to hold the plaintiff to the September 13, 2002 deadline. There also was no evidence that the defendant asked the plaintiff to cease all work on September 13, 2002. Rather, not until the plaintiff sought payment for the balance due on the contract and the parties disagreed on the credits due the defendant for work it assumed, did the defendant inform the plaintiff that it was not going to pay the balance on the basis of the plaintiff's failure to complete construction by the September 13, 2002 deadline.

"When it is said that time is of the essence, the proper meaning of the phrase is that the performance by one party at the time specified in the contract or within the period specified in the contract is essential in order to enable him to require performance from the other party." (Internal quotation marks omitted.) Mazzotta v. Bornstein, 104 Conn. 430, 437, 133 A. 677 (1926). "Its commonly understood meaning is that insofar as a time for performance is specified in the contract, failure to comply with the time requirement will be considered to be a material breach of the agreement. See [id., at 437, 133 A. 677....]" (Citations omitted.) Retrofit Partners I, L.P. v. Lucas Industries, Inc., 201 F.3d 155, 160 (2d Cir.2000).

Here, it is undisputed that the construction project was not completed by the specified "time is of the essence" date. The defendant argues, accordingly, that the plaintiff's failure to complete construction in a timely manner constituted a material breach and, thus excused the defendant from paying the remaining balance due on the contract price. In response, the plaintiff argued at trial, and the court found, that the defendant had implicitly waived the time is of the essence...