Conaway v. Prestia

• Decision Date: 13 September 1983
• Citation: 464 A.2d 847,191 Conn. 484
• Court: Connecticut Supreme Court
• Parties: Annette CONAWAY et al. v. Alfred PRESTIA et al.

Page 847

464 A.2d 847

191 Conn. 484

Annette CONAWAY et al. v. Alfred PRESTIA et al.

Supreme Court of Connecticut.

Argued June 9, 1983.

Decided Sept. 13, 1983.

John D. Blackford, New Britain, with whom, on the brief, was Anthony J. Monterosso, New Britain, for appellants (defendants).

David A. Pels, Newington, for appellees (plaintiffs).

Before HEALEY, PARSKEY, SHEA, GRILLO and SPONZO, JJ.

GRILLO, Associate Justice.

This appeal addresses issues concerning the applicability and scope of the Connecticut Unfair Trade Practices Act (hereinafter CUTPA); General Statutes §§ 42-110a through 42-110q; ¹ in an action seeking, inter alia, recovery of rental payments obtained in violation of §§ 47a-5 ² and 47a-57 ³ (formerly § 19-347r) of the General Statutes.

The relevant facts are not in dispute. The defendant landlords own four apartment buildings in the city of New Britain. At all times relevant to the present appeal, each building was at least fifteen years old and contained more than four rental units. In 1973, New Britain adopted the provisions of General Statutes (Rev. to 1972) § 19-347r and limited its applicability to buildings containing four or more housing units, thereby requiring a certificate of occupancy, after a vacancy and prior to human habitation, for each rental unit in the defendants' buildings. ⁴

In May, 1979, the defendants received written notice from the city of New Britain informing them of the requirement that certificates of occupancy be obtained prior to any units being rented. Although the defendants applied for certificates of occupancy on one of the buildings, their application was denied. A certificate has not been obtained for any of the units within the four buildings owned by the defendants.

The plaintiffs are fifty-five tenants who rented units in the defendants' buildings from May, 1979, through October, 1980. Each plaintiff rented his apartment after a vacancy. From May, 1979, through October, 1980, the defendants collected $58,695 in rent from the tenants in the plaintiff class.

The plaintiffs instituted this action in May, 1980, seeking compensatory and punitive damages as well as injunctive relief. The fulcrum of the plaintiffs' complaint is that the defendants' failure to comply with General Statutes §§ 47a-5 and 47a-57, as well as General Statutes (Rev. to 1979) § 47a-4(c) and § 47a-7(a), ⁵ constituted "unfair or deceptive acts" within the purview of CUTPA. Class certification was subsequently granted. At trial, the testimony of three officials of the city of New Britain established that each of the defendants' buildings contained numberous and severe housing and health code violations. The case was thereafter submitted to the trial court on a stipulation of facts as recited above.

The trial court found that the apartments "were uninhabitable and constituted a serious threat to the health and welfare of the plaintiff occupants," and that therefore the defendants had failed to discharge their responsibilities pursuant to § 47a-7. Accordingly, the court enjoined the defendant from evicting the plaintiffs; General Statutes § 47a-4a; and from any further collection of rents without first obtaining certificates of occupancy. General Statutes §§ 47a-5, 47a-57.

Additionally, the court concluded that the plaintiffs were entitled to damages under the provisions of CUTPA. Noting the continued collection of rents despite the uninhabitability of the apartments and without certificates of occupancy as required by §§ 47a-5 and 47a-57 and as ordered by New Britain officials, the court characterized the actions of the defendants as "unfair or deceptive acts or practices."

The court construed the plaintiffs' "actual damages"; General Statutes § 42-110g(a); ⁶ as the rents illegally collected from May 1, 1979, through October, 1980. Although noting that the defendants are entitled to a setoff against any recoverable sum for the reasonable use and occupancy value of the occupied rental units, the court held that the burden of proving this occupancy value rested upon the defendants. Since evidence concerning the reasonable value of the rental units was established for only three members of the plaintiff class, the court entered a setoff in favor of the defendants only to the extent of the reasonable use and occupancy value of the units occupied by these plaintiffs. ⁷ After appointing a receiver of rents, the trial court rendered judgment for the plaintiffs, from which judgment the defendants appeal. ⁸

On appeal, the defendants present the following primary issues: (1) Whether the trial court erred in concluding that §§ 47a-5 and 47a-57 impose a duty upon landlords to obtain certificates of occupancy; (2) whether the trial court erred in concluding that the defendants' actions amounted to unfair or deceptive trade practices; (3) whether the trial court erred in its award of compensatory damages and in its concomitant allocation of the burden of proof concerning the issue of damages.

The threshold issue presented by the defendants attacks the trial court's conclusion that §§ 47a-5 and 47a-57 impose a duty upon landlords to procure certificates of occupancy prior to the lawful collection of rent. The defendants argue that either the tenant or the landlord may apply for the certificate and that therefore no "specific" duty rests upon the defendants. We disagree.

The contention of the defendants is adequately addressed by the clear language of the statutes. Subsection (a) of § 47a-57 unequivocally states that "housing units ... shall not be occupied for human habitation, after a vacancy, until a certificate of occupancy has been issued ...." Under both subsection (c) of § 47a-57 and § 47a-5, the failure to comply with subsection (a) prohibits the "owner or lessor" from recovering rents. Moreover, under the specific mandates of § 47a-7, entitled "Landlord's Responsibilities," a landlord must "[c]omply with the requirements of ... all applicable building and housing codes materially affecting health and safety of both the state or any political subdivision thereof; (2) make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition, except where the premises are intentionally rendered unfit or uninhabitable by the tenant ...."

The unmistakable import of these statutes places the burden upon the landlord to obtain the required certificate of occupancy. Pursuant to § 47a-57, the certificate is required after a vacancy and prior to "human habitation," an interval during which only an owner would have any authority to secure the certificate. Failure to comply imposes sanctions only upon the "owner or lessor" by forbidding the recovery of rents. Finally, it is specifically the duty of the landlord to comply with all applicable building and housing codes, which form the raison d'etre for the certificate of occupancy. We conclude that § 47a-57 "establishes a procedure whereby landlords must obtain a Certificate of Apartment Occupancy ... before renting any apartment in an apartment house containing four or more dwelling units." (Footnote omitted.) Hill Construction Co. v. State, 366 F.Supp. 737, 738 (D.Conn.1973). The contention of the defendants lacks validity, legally and pragmatically. ⁹

Citing numerous cases, the defendants vigorously attack the finding of the trial court that the defendants engaged in any unfair or deceptive acts or practices as prohibited by General Statutes § 42-110b. ¹⁰ In light of the subordinate facts recited above, however, we agree with the trial court's conclusion that CUTPA creates a private cause of action to recover damages based upon violations of §§ 47a-57 and 47a-5. ¹¹ "For guidance in determining what may constitute unfair or deceptive acts or practices, CUTPA directs us to the 'interpretations given by the Federal Trade Commission and the federal courts to Section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)), ... as from time to time amended.' General Statutes § 42-110b(b)." Ivey, Barnum & O'Mara v. Indian Harbor Properties, Inc., 190 Conn. 528, 533, 461 A.2d 1369 (1983). We have held that, as a threshold requirement, private litigants proceeding under CUTPA "must demonstrate some nexus with the public interest." Id., 537, 461 A.2d 1369.

In FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972), the United States Supreme Court, in construing the scope of the Federal Trade Act and the concomitant power of the federal trade commission, concluded that "legislative and judicial authorities alike convince us that the Federal Trade Commission does not arrogate excessive power to itself if, in measuring a practice against the elusive, but congressionally mandated standard of fairness, it, like a court of equity, considers public values beyond simply those enshrined in the letter or encompassed in the spirit of the ... laws." (Footnote omitted.) Id., 244, 92 S.Ct., 905. The court thereupon proceeded favorably to cite the factors considered by the commission in determining whether an action or practice, while not explicitly in violation of the law or deceptive, is nevertheless unfair: " '(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 ....' " Id., 244n, 92 S.Ct., 905.

In the present case the defendants' actions of receiving the rent, while not specifically prohibited pursuant to §§ 47a-5 and 47a-57, unquestionably offended the public policy, as embodied by these statutes, of insuring minimum standards of housing safety and habitability. As recited above, § 47a-57 imposed a...