Carrillo v. Goldberg

• Decision Date: 19 March 2013
• Docket Number: No. 34075.,34075.
• Citation: 61 A.3d 1164,141 Conn.App. 299
• Court: Connecticut Court of Appeals
• Parties: Luis CARRILLO et al. v. Keith GOLDBERG et al.

141 Conn.App. 299

61 A.3d 1164

Luis CARRILLO et al.

v.Keith GOLDBERG et al.

No. 34075.

Appellate Court of Connecticut.

Argued Dec. 5, 2012.

Decided March 19, 2013.

Thomas J. O'Neill, Stamford, for the appellants (plaintiffs).

Abram Heisler, for the appellees (defendants).

GRUENDEL, ROBINSON and WEST, Js.

GRUENDEL, J.

The plaintiffs, Luis Carrillo and Sandra Carrillo, appeal from the judgment of the trial court awarding them damages and interest for the failure of the defendants, Keith Goldberg and Leigh Ann Goldberg, to return their security deposit upon the termination of their lease in violation of General Statutes § 47a21 (d), punitive damages and attorney's fees pursuant to the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq., and interest pursuant to General Statutes § 52–192a. The plaintiffs claim that the court erred in (1) declining to award them double damages and interest pursuant to § 47a–21 (d)(2),¹ (2) miscalculating interest pursuant to § 47a–21 (i)(1),² (3) declining to award them treble damages pursuant to General Statutes § 52–564,³ (4) awarding them insufficient punitive damages and attorney's fees for the defendants' CUTPA violation, (5) denying their request for posttrial discovery of the defendants' financial background and their motion for a hearing on punitive damages, (6) denying their motion for a hearing on attorney's fees and (7) declining to award them interest pursuant to General Statutes § 37–3a.⁴ We affirm in part and reversein part the judgment of the trial court.

The following facts found by the court and procedural history are relevant to our resolution of these claims. On July 23, 2007, the plaintiffs and the defendants entered into a lease agreement for the defendants' single-family home in New Canaan. The agreement provided for the plaintiffs to take possession of the home on August 31, 2007, and for the lease to terminate on August 30, 2008, with monthly rent payments of $4800. At the inception of the lease, the plaintiffs paid to the defendants a “security deposit” of $4800, ⁵ the first month's rent of $4800 and the last month's rent of $4800. The defendants opened checking and savings accounts at Wachovia Bank, depositing the “security deposit” and last month's rent into the savings account, and the first month's rent into the checking account. By October 1, 2007, the defendants had transferred $4800 from the savings account to the checking account, which was then used to satisfy the defendants' obligation to the real estate agent who had arranged the leasing of the home to the plaintiffs. On November 6, 2007, the defendants transferred another $3000 from the savings account to the checking account and immediately thereafter paid from the checking account a veterinary bill for that same amount of $3000. After making those transfers from the savings account to the checking account, the savings account was left with a balance of $1812.32.

In the spring of 2008, the basement of the house flooded, causing damage to the plaintiffs' personal property. The plaintiffs, with the defendants' consent, deducted $941 from the rent payment for March, 2008, as compensation for these damages. On March 5, 2008, the defendants transferred $941.43 from the savings account to the checking account, leaving the savings account with a balance of $19.38. By the conclusion of the plaintiffs' tenancy, a combined balance of less than $400 of the $9600 paid to the defendants for security and last month's rent remained in the checking and savings accounts.

The lease agreement contained a provision that allowed for its early termination at the defendants' option, with ninety days' notice to the plaintiffs. At some point during the spring of 2008, the defendants gave such notice to the plaintiffs. The parties came to an agreement that the plaintiffs would vacate the premises by August 20, 2008. The plaintiffs withheld the rent payment for July, 2008, with the understanding that the last month's rent paid at the inception of the lease was to be applied as rent for July, 2008. For the additional twenty days in August that the plaintiffs occupied the premises, the plaintiffs paid a prorated rent amount of $3096.77. Two days before the agreed upon termination of the leasehold, the plaintiffs vacated the premises.

On September 28, 2008, counsel for the plaintiffs sent to the defendants, via overnight mail, a letter regarding the security deposit and advising them of their forwarding address. The defendants, however, the day before, had sent an e-mail to the plaintiffs that contained an accounting of claimed damages and setoffs against the plaintiffs' security deposit. After applying the plaintiffs' security deposit to the amount of claimed damages, the defendants' letter demanded payment of $6778.71 in compensation for their claimed damages. As articulated by the court, “the notable items claimed by [the defendants] as damages or setoffs are the following: $3698.91 in expenses for travel from California to Connecticut to inspect the premises, $941 for rent withheld for the month of March, 2008 ... $4800 as an additional month's rent for holding over past August 13, 2008, $900 in legal fees and $1025 as costs of various items of physical damage.” At trial, Keith Goldberg admitted that he and his wife, Leigh Ann Goldberg, were not entitled to any of the sum claimed as damages in his accounting sent to the plaintiffs, except for $231.80 in fuel oil expenses. Keith Goldberg, during his testimony at trial, claimed that his attorney, William Osterndorf, had advised him to claim these expenses. Osterndorf, when testifying at trial, denied giving Keith Goldberg such advice. In fact, he testified that he counseled Keith Goldberg that the travel expenses and additional month's rent were “questionable” claims for damages. The court found that the defendants' claimed damages were pretextual.

With respect to the plaintiffs' claim that the defendants failed to return their security deposit pursuant to § 47a–21(d), the court found in favor of the plaintiffs, awarding them $4800 in damages, plus $216.56 in interest. The court, however, did not find that the defendants had triggered the double damages provision of § 47a21 (d) because the defendants had sent a written accounting of the damages within fifteen days of receiving notice of the plaintiffs' forwarding address. The court also found that the defendants' comingling of the plaintiffs' security deposit with their own funds and the use of the plaintiffs' security deposit for their own personal expenses violated § 47a–21 (h)(1), and also constituted CUTPA violations. As the court found that the defendants' behavior evinced either “reckless indifference to [the plaintiffs'] rights or [an] intentional and wanton violation of those rights,” it awarded the plaintiffs $3000 in punitive damages, $2500 in attorney's fees and $119 in costs. In deriving those specific amounts, the court did not articulate its reasoning, simply stating that the facts and circumstances of the case supported such an award. The court found that the plaintiffs' claim that the defendants had committed statutory theft was without merit because the evidence presented at trial did not support the requisite finding of intent. ⁶ On November 1, 2011, the plaintiffs filed a motion to open the judgment and to reargue and for hearings on punitive damages and attorney's fees. The court denied their motion on November 8, 2011. This appeal followed.

IDOUBLE DAMAGES AND INTEREST PURSUANT TO § 47a–21

We address first the plaintiffs' claim regarding the court's failure to award them double damages under § 47a–21 (d). The plaintiffs argue that the court's award of only $4800 for the defendants' failure to return their security deposit was improper because § 47a–21 (d) requires an award of double damages when a tenant's security deposit is not returned in the fashion prescribed by this subsection.⁷ We agree.

“We accord plenary review to the court's legal basis for its damages award. See First Federal Savings & Loan Assn. of Rochester v. Charter Appraisal Co., 247 Conn. 597, 603, 724 A.2d 497 (1999). The court's calculation under that legal basis is a question of fact, which we review under the clearly erroneous standard. Westport Taxi Service, Inc. v. Westport Transit District, 235 Conn. 1, 28, 664 A.2d 719 (1995).” American Diamond Exchange, Inc. v. Alpert, 101 Conn.App. 83, 103, 920 A.2d 357, cert. denied, 284 Conn. 901, 931 A.2d 261 (2007).

Before we can resolve the question of whether the court erroneously failed to award the plaintiffs double the amount of their security deposit, it is necessary to set forth the applicable definition of “security deposit.” Section 47a–21 (a)(10) defines a “security deposit” as “any advance rental payment other than an advance payment for the first month's rent....” While in common parlance a “security deposit” may have a conceptually distinct meaning from an advance payment of periodic rent, under Connecticut law, the term “security deposit” comprises all forms of advance rental payment, regardless of its intended use. According to the statutory definition, therefore, the total amount of the security deposit collected from the plaintiffs was $9600.

We turn now to the issue of whether the court improperly failed to double the plaintiffs' security deposit in its award of damages. In its memorandum of decision dated October 13, 2011, the court found that the double damages provision of § 47a–21 (d)(2) had not been triggered in this case. The court reasoned that the defendants had provided an accounting of claimed damages to the plaintiffs before the plaintiffs sent the defendants notice of their forwarding address, thereby precluding an award of double damages pursuant to § 47a–21 (d)(2). As the court's finding is contrary to the language of § 47a–21 (d)(2), we conclude that the court erred in declining to award the plaintiffs...