Biro v. Matz, 32413.

• Decision Date: 29 November 2011
• Docket Number: No. 32413.,32413.
• Citation: 132 Conn.App. 272,33 A.3d 742
• Court: Connecticut Court of Appeals
• Parties: Tamas BIRO et al. v. Victor H. MATZ et al.

132 Conn.App. 272

33 A.3d 742

Tamas BIRO et al.

v.Victor H. MATZ et al.

No. 32413.

Appellate Court of Connecticut.

Argued Sept. 21, 2011.Decided Nov. 29, 2011.

Richard P. Terbrusch, for the appellants (plaintiffs).

Thomas W. Beecher, with whom, on the brief, was Stephanie B. Nickse, Danbury, for the appellees (defendants).

GRUENDEL, ALVORD and FLYNN, Js.

FLYNN, J.

This appeal originates from a contract for the purchase of commercial real estate in Danbury that was deeded to the buyers. The buyers appeal from the trial court's judgment granting the sellers' motion for summary judgment. On appeal, the buyers claim the court erred in finding there was no material question of fact with respect to their claims of breach of contract, negligent misrepresentation, intentional misrepresentation, fraudulent inducement, and violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq. We affirm the judgment of the trial court.

The following uncontested facts inform our review. The defendants, Victor H. Matz and Ingrid M. Luning (sellers), are siblings and the former owners of a commercial warehouse (premises) located in Danbury. More than thirty years ago in 1980, the sellers hired a contractor to construct an expansion to the warehouse. According to his deposition testimony, Matz believed the contractor would provide a certificate of occupancy based on the construction contract's warranties language, which provides in relevant part: “Warranties ... all applicable local, state, [n]ational codes and good engineering practice....” Matz also testified during his deposition that he had found a receipt from the city of Danbury for a certificate of occupancy, which he believed was indicative of issuance of a certificate of occupancy. The Danbury building department never informed Matz of any problematic issues relating to the construction either during or after the addition was built.

On or about July 11, 2006, the sellers entered into a contract with the plaintiffs, Tamas Biro and Vilmos Havasi (buyers), to sell the premises to the buyers in an “as is” condition and “with all faults....” Both sellers averred in their respective affidavits that they were not in the business of selling commercial real estate. Matz' factory had occupied the premises for years. His interest in selling the premises was to move his family's trophy and awards manufacturing business out of state, and Luning's interest was to invest her portion of the sale proceeds toward her retirement. Closing on this real estate transaction later took place, and the deed was delivered to the buyers.

Section 5 of the contract detailed the terms relating to the condition of the premises. Additionally, in contract terms that expressly survived the “closing and the deliver[y] of the deeds,” the parties agreed that the buyers had “examined ... the [p]remises,” which were to be sold “as is,” without any representation about the condition of the premises on which the buyers relied, unless specifically embodied in the agreement, “with all faults” existing. The buyers agreed that they had been requested to “investigate all matters” relevant to the premises and to rely solely on their own inspection or information obtained or otherwise available to them. The buyers were to “assume all future obligations and liabilities” related to the premises raised subsequent to closing.

By contrast, § 8, paragraph (a) of the contract, relied on by the buyers, stipulated that the property would be conveyed “subject to ... [a]ny restrictions or limitations imposed or to be imposed by governmental authority, including the zoning and planning rules and regulations of the [c]ity or [t]own, and region or district, if any, in which the [p]remises is situated, provided the same are not being violated by the subject premises and the building thereon.” This paragraph did not indicate that it would survive the passage of the deed.

A title affidavit from Fidelity National Title Insurance Company of New York, representing that “[t]here have been no additional buildings constructed, or additions added to existing buildings, on the property within the past three (3) years,” also was executed at the time of closing. The “survey update” section of the title affidavit provides in relevant part: “I/We have examined a certain survey of the property made by –––– dated ––––and entitled, ‘––––’.” The blank spaces were never completed by the buyers' counsel, who prepared the affidavit, nor by the sellers.

On or about February 9, 2008, the buyers received an offer from R & J Electrical Contractors, LLC (R & J Electrical), to purchase the premises for $1.4 million. The parties entered into a contract of sale on April 27, 2008, with R & J Electrical agreeing to pay a sum of $1.4 million for the property. Prior to closing, the appraiser from the mortgage bank informed Richard Gustavson, the owner of R & J Electrical, that the appraisal value of the premises was $1 million. Gustavson also conducted his due diligence prior to closing and discovered that no certificate of occupancy ever was issued for the premises by the city of Danbury. Gustavson then submitted a new offer of $1 million to purchase the building, but this offer was rejected by the buyers. As a result of this rejection, R & J Electrical decided not to purchase the premises, and title has remained in the buyers ever since.

Because part of the premises lacked an occupancy permit, the buyers brought an action against the sellers in Danbury Superior Court on November 21, 2008, alleging breach of contract, negligent misrepresentation, intentional misrepresentation, fraudulent inducement, and violations of CUTPA. The buyers relied heavily on the language in § 8 of the contract, stipulating that conveyance of the property was subject to local zoning regulations, provided they were not violated, as the primary basis for their arguments relating to the first four counts of the complaint. However, the trial court concluded that the terms of the contract merged into the conveyance deed that replaced and superseded the underlying terms of the contract, on which the buyers relied, when the deed was formally accepted by the buyers. The court then quoted the pertinent provisions of General Statutes § 42–110b (a), which is part of CUTPA and which provides in relevant part that “[n]o person shall engage in unfair ... acts or practices in the conduct of any trade or commerce.” The court rejected the buyers' CUTPA claim by concluding that CUTPA applies only to sellers engaged in the business of selling commercial real estate and the sellers did not engage in such business. The court rendered summary judgment as to all counts in the sellers' favor on June 9, 2010. This appeal followed.

We begin by setting forth our well established standard of review. “Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law.... On appeal, we must determine whether the legal conclusions reached by the trial court are legally and logically correct and whether they find support in the facts set out in the memorandum of decision of the trial court.... Our review of the trial court's decision to grant [a] ... motion for summary judgment is plenary.” (Internal quotation marks omitted.) Jaiguay v. Vasquez, 287 Conn. 323, 362, 948 A.2d 955 (2008).

“An appellate court's review of a trial court decision is circumscribed by the appropriate standard of review.... When ... the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” (Internal quotation marks omitted.) Powers v. Olson, 252 Conn. 98, 104–105, 742 A.2d 799 (2000).

“Where [as here] ... there is clear and definitive contract language, the scope and meaning of that language is not a question of fact but a question of law.... In such a situation our scope of review is plenary, and is not limited by the clearly erroneous standard.” (Internal quotation marks omitted.) Antonino v. Johnson, 113 Conn.App. 72, 75, 966 A.2d 261 (2009).

Because the trial court rendered judgment in favor of the sellers as a matter of law and our resolution of this appeal requires a review of the contractual language, our review is plenary. With this standard in mind, we examine each of the buyers' claims in turn.

I

The buyers first contend that the trial court improperly concluded that there was no question of material fact with respect to the breach of contract claim. Specifically, the buyers argue that there is a genuine issue of material fact as to whether (1) the sellers breached the terms of the contract when they conveyed the property without a proper certificate of occupancy for part of its improvements, and (2) the breached terms of the contract survived the closing and delivery of the deed. We disagree.

A

We first address the issue of what terms of the contract survived the closing and delivery of the deed. Unless the contract expressly provides that certain terms shall survive, “it is axiomatic that a deed supersedes the underlying contract.” Powers v. Olson, supra, 252 Conn. at 106, 742 A.2d 799. “[A]cceptance of a deed in pursuance of articles of agreement for the conveyance of land is prima facie the completion of the contract; and all stipulations contained therein ... are merged in the deed although omitted therefrom....” (...