Burns v. Adler

• Decision Date: 28 March 2017
• Docket Number: SC 19560, (SC 19561)
• Citation: 325 Conn. 14,155 A.3d 1223
• Court: Connecticut Supreme Court
• Parties: James E. BURNS, Jr. v. David Y. ADLER, et al.

325 Conn. 14

155 A.3d 1223

James E. BURNS, Jr.

v.David Y. ADLER, et al.

SC 19560, (SC 19561)

Supreme Court of Connecticut.

Argued November 8, 2016

Officially released March 28, 2017

David N. Rosen, with whom, on the brief, was Steven D. Ecker, for the appellant in SC 19560, appellee in SC 19561 (named defendant).

William C. Franklin, for the appellee in SC 19560, appellant in SC 19561 (plaintiff).

Rogers, C. J., and Palmer, Eveleigh, McDonald, Espinosa, Robinson and Vertefeuille, Js.

ROGERS, C.J.

The primary issue that we must resolve in this certified appeal is whether the bad faith exception to the bar on the enforcement of home improvement contracts that do not comply with the Home Improvement Act (act), General Statutes § 20–418 et seq., entitled the plaintiff contractor, James E. Burns, Jr., to recover damages from the defendant homeowner, David Y. Adler,¹ for home improvement services despite the plaintiff's noncompliance with that statute. The parties entered into an agreement whereby the plaintiff agreed to furnish materials and supply labor in connection with the renovation of a residence owned by the defendant in the town of Salisbury. After the renovation project was largely complete, a dispute arose regarding amounts that the defendant owed the plaintiff for services performed. Thereafter, the plaintiff brought this action claiming, among other things, breach of contract and unjust enrichment. The defendant raised the special defense that the plaintiff's claims were barred because the agreement did not comply with the requirements of General Statutes (Rev. to 2007) § 20–429.² In turn, the plaintiff claimed that the defendant was precluded from relying on § 20–429 because his refusal to pay the plaintiff was in bad faith. After a trial to the court, the trial court concluded that the plaintiff had incurred damages in the amount of $214,039 and that § 20–429 did not bar recovery because the defendant's refusal to pay was in bad faith. Accordingly, the court rendered judgment for the plaintiff in the amount of $214,039. The defendant appealed to the Appellate Court, which affirmed the judgment of the trial court. See Burns v. Adler , 158 Conn.App. 766, 808, 120 A.3d 555 (2015). We then granted the defendant's petition for certification to appeal, limited to the following issues: (1) "Did ... § 20–429(f) abrogate the bad faith exception to the [act] created in Habetz v. Condon , 224 Conn. 231, 240, 618 A.2d 501 (1992) ?"; and (2) "Did the Appellate Court properly affirm the judgment of the trial court in favor of the plaintiff?" Burns v. Adler , 319 Conn. 931, 125 A.3d 205 (2015) ; see also footnote 7 of this opinion. We conclude that the first certified question is not reviewable because it was not raised in the trial court. We further conclude that the defendant did not act in bad faith and, therefore, the Appellate Court improperly affirmed the judgment of the trial court on the ground that the plaintiff was barred from invoking the protection of the act. Accordingly, we reverse the judgment of the Appellate Court and conclude that the case must be remanded to the trial court with direction to render judgment for the defendant.

The record reveals the following facts, which are undisputed or were found by the trial court, and procedural history. In September, 2007, the plaintiff, who is a self-employed construction worker, and the defendant entered into negotiations regarding the renovation and remodeling of a weekend residence that the defendant was planning to buy in the town of Salisbury. The work was to include substantial demolition of the existing structure, the addition of a second floor and the expansion of the structure's footprint. The defendant wanted the work to be performed as quickly as possible so that he and his family could use the residence during the summer of 2008. The parties discussed a cost of approximately $400,000.

Pursuant to these discussions, the plaintiff prepared a written "Home Improvement Service Agreement" (agreement) dated October 5, 2007. The agreement described the services that the plaintiff was to perform as "begin demolition [of] existing home in preparation of planned remodel." The agreement also provided that "[a]ny modifications or changes to the above described scope of services shall be set forth in a written [c]hange [o]rder signed by both parties ." (Emphasis in original.) In addition, the agreement provided that the defendant would pay the plaintiff "[$45] per man plus any expenses to include dumpsters [and/or] materials." The agreement further provided that "once full plans have been provided we will start another contract with firm pricing for every aspect of [the] job with the exclusion of any changes as the project progresses." The trial court concluded that the agreement did not satisfy the requirements of § 20–249 (a) or (f) because it was not signed by the plaintiff, it did not contain a completion date and the plaintiff failed to prove that he delivered a completed copy of it to the defendant.³

From October, 2007 through September, 2008, the plaintiff worked exclusively on the defendant's renovation project. During that period, the plaintiff received numerous work orders related to the project from multiple sources, including the defendant, his wife, Amie R. Weitzman, the defendant's architect, Elizabeth Slotnick, and Weitzman's assistant, Julie Weiner. None of these four people had a complete understanding of the work that the plaintiff was being requested to perform. In addition, none of them ever inquired about the cost of doing the various items of work that they requested. The written plans for the project were frequently revised by the defendant and others acting on his behalf, and many of the changes were significant. Indeed, the trial court found that the "project was marked by untrammeled profligacy on the part of the [defendant]."⁴ According to the plaintiff, he continued to rely on the time and materials provision of the agreement and never executed a "contract with firm pricing," as provided by the agreement, because he never received a full set of plans and "things constantly changed from day to day ...."

As the project moved forward, the plaintiff periodically requested payments from the defendant, which the defendant provided. The plaintiff did not send the defendant itemized bills, however, and the defendant initially did not request them. Rather, the plaintiff calculated his expenses from his checkbook records, invoices and time sheets.⁵ The plaintiff did not retain all invoices and time sheets relating to the project, nor did he keep a daily construction log or other records that would show which tradesmen were on the site, what work was performed, or what materials were delivered to the site.

On March 15, 2008, the plaintiff presented the defendant with a written budget report showing that the projected total cost of the project was $810,267, including $521,944 for work already completed. On March 25, 2008, the plaintiff presented the defendant with a revised budget report showing that the projected total cost of the project was $795,038, including $518,352 for work already completed. On May 27, 2008, the plaintiff informed the defendant by e-mail that the budget had increased to $886,954, not including certain additional items that the defendant had requested. The e-mail stated that "all future changes will be done on a time and material basis unless it is more efficient to bid," and that "[t]here will ... be a need for an [e-mail] or written response for these changes from either you or your wife's office approving them ...." The plaintiff also told the defendant that he owed substantial amounts to his subcontractors and required additional funding to keep them working. The defendant was unhappy with the revised budget, but he chose to retain the plaintiff as his contractor because he was anxious to have the project completed so that he could use the house. Although the defendant contended that he believed that the e-mail represented the terms of a new "fixed price contract," he and Weitzman continued to ask the plaintiff to perform additional tasks.

On August 25, 2008, the plaintiff sent a letter to the defendant setting forth the "final numbers for all work performed" at the residence. The plaintiff stated that the total cost of the project was $1,188,350 and that payments received to date totaled $985,000, for a balance due of $203,350.⁶ At that point, the project was approximately 98 percent complete. In response, the defendant sent an e-mail to the plaintiff on September 3, 2008, summarizing and comparing the various budget reports that the plaintiff had provided. The defendant complained that "the numbers do not add up and there are different categories being created in each budget." According to the defendant's calculations, the total cost of the project was $963,923, or $21,077 less than the $985,000 that the defendant had already paid. The $963,923 figure included extra items of work that the defendant had approved since the plaintiff's May 27, 2008 budget report. The defendant indicated that he was willing to pay for these extras if the plaintiff could establish that the amounts shown were correct, and he requested additional information for certain items. The defendant also noted that the plaintiff had not begun to address "the 100+ item punch list" that the defendant had provided to the plaintiff. Finally, the defendant stated that he had been "very happy with the quality of [the plaintiff's] work generally and it is my hope that we can resolve this matter amicably."

On September 8, 2008, the plaintiff informed the defendant that the total cost of the project had increased to $1,199,911, and the total balance due was $214,911. On September 12, 2008, the plaintiff sent an e-mail to the defendant itemizing in detail the work that he and others had been performing at the residence since June 1, 2008. The plaintiff, however, did...