DeCarlo and Doll, Inc. v. Dilozir, 15568

• Decision Date: 08 July 1997
• Docket Number: No. 15568,15568
• Citation: 45 Conn.App. 633,698 A.2d 318
• Court: Connecticut Court of Appeals
• Parties: DeCARLO AND DOLL, INC. v. Terry M. DILOZIR.

Page 318

698 A.2d 318

45 Conn.App. 633

DeCARLO AND DOLL, INC. v. Terry M. DILOZIR.

No. 15568.

Appellate Court of Connecticut.

Submitted on Briefs March 24, 1997.

Decided July 8, 1997.

Dominic J. Caciopoli, filed a brief for appellant (plaintiff).

Homer G. Scoville, filed a brief for appellee (defendant).

Before LAVERY, HEIMAN and FRANCIS X. HENNESSY, JJ.

LAVERY, Judge.

The plaintiff, DeCarlo & Doll, Inc., appeals from the judgment of the trial court for the defendant, Terry M. Dilozir, in a breach of a contract action. On appeal, the plaintiff contends that the trial court improperly found the contract ambiguous and therefore determined that a subsequent letter between the parties was a contractual amendment. This determination by the trial court permitted the defendant to prevail on a special defense that alleged that the defendant's payment obligations under the contract were conditioned on the defendant's securing financing from a third party, which never occurred. We agree with the plaintiff and reverse the judgment of the trial court.

The following facts are relevant to this appeal. On July 10, 1989, the defendant signed and accepted a proposal submitted by the plaintiff dated June 16, 1989. The first sentence of the proposal stated: "We are pleased to submit this proposal for engineering and technical services required to prepare a site plan and applications for development of proposed self storage and business services at the Nutec Property on Route 85 in Amston." The proposal consisted of four parts.

Part one of the proposal was entitled "basic scope of services" and had ten separate subparts. ¹ These ten subparts listed the services that the plaintiff would perform for the defendant, including the preparation of various plans and reports concerning the development of the defendant's facility. Part two of the proposal listed "additional services" that were not included in the plaintiff's basic scope of services, but could be provided by the plaintiff if the defendant desired. Part three of the proposal was entitled "Fees, Schedules, and Payment" and had seven parts ² that addressed the payment structure of the transaction. The fourth and final part of the proposal was entitled "Contract/Notice to Proceed" and stated: "We are looking forward to the opportunity of being of service to you on this project. If this proposal meets your approval, kindly sign and return one copy to this office with the $3,000 retainer. This will serve as our notice to proceed and contract."

In addition to the aforementioned proposal, the parties executed an "amendment" to their initial agreement, which was signed by the plaintiff on July 6, 1989, and by the defendant on July 10, 1989. Part one of this amendment stated that "[t]his amendment is to be attached to, made a part of and incorporated by reference into the above noted agreement between [the parties].... The fees, schedules, and payments in section III of the agreement are amended to or supplemented as indicated below."

Part two of the amendment entitled "Fees, Schedules, and Payments" stated: "A) Item 4 of the Original Contract 'Retainer' will be reduced from a retainer of $3,000 to a retainer of $2,000. B) Item 5 'payment schedule' shall be revised to be 6 monthly payments and the interest accrued for carrying charges. Interest will be as stated in the original contract of 1% on amounts over 30 days. The 6 monthly payments will be $3666.67 each month starting with the July invoices. The 6th invoice will also show the retainer being applied bringing the total to $24,000 not including interest. You will be invoiced separately for meetings which are on a per diem basis in accordance with the original contract...." Part three of the amendment stated: "This agreement does not alter or modify terms and conditions of any other agreements between [the parties]."

Following the execution of the original agreement and its accompanying amendment, the plaintiff sent a letter dated February 8, 1990, to the defendant. This letter stated: "In our proposal dated June 16, 1989, we suggested a budget of $2,000 for the application preparation and meeting attendance (basic scope of services, item 10). Meetings with the abutters to your project and design changes due to Town Staff and DOT comments were not included in this budget. Because of this increase in scope, we suggest the budget for this item be increased to $8,000. Kindly sign and return one copy to this office."

The defendant added a handwritten sentence to the lower portion to the letter. This sentence stated: "Subject to payment with all outstanding payments to be paid in full at time of financing of project" and was initialed by both the plaintiff and the defendant. The defendant signed and dated this letter on August 2, 1990.

The plaintiff performed the services mentioned in the proposal and billed the defendant for the amount of $25,411.38. The defendant never received financing and did not pay $22,926.40 from the bill for the plaintiff's services. The plaintiff brought a breach of contract action against the defendant, and the defendant filed a counterclaim and special defenses. ³

After a trial, the trial court ruled that the second sentence of section three, part two, of the contract is ambiguous. That sentence states: "We suggest a budget of $2,000 for this work, however this budget may change as the scope is defined." The trial court held: "I find that there was an ambiguity in the initial contract, about whether the $2,000 was an estimate or a maximum cap, and when the plaintiff sent the defendant [the letter from February 8, 1990] asking that the defendant agree to an increase in the budget for item 10 in [the original contract], from $2,000 to $8,000, that is a very strong indication, from which I draw the inference, that the intent of the parties was that the $2,000 would be a cap and not merely an estimate. And therefore, the increase in that cap from $2,000 to $8,000 constituted a consideration flowing from the defendant to the plaintiff ... which supported the newly negotiated provision that's written in by hand.... Whatever money became due after the execution of [the letter from February 8, 1990], and whatever money was due at the time of execution of [the letter from February 8, 1990], would all be contingent."

Accordingly, the trial court found for the plaintiff on his third special defense. The defendant, in his third special defense, contended that his payments to the plaintiff were conditioned on his obtaining financing, which was an event that never occurred.

"Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact ... [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law.... In such a situation our scope of review is plenary, and is not limited by the clearly erroneous standard.... When only one interpretation of a contract is possible, the court need not look outside the four corners of the contract.... In addition, [t]he circumstances surrounding the making of the contract, the purposes which the parties sought to accomplish and their motives cannot prove an intent contrary to the plain meaning of the language used.... Finally, [t]he court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity." (Citations omitted; internal quotation marks omitted.) Venture Partners, Ltd. v. Synapse Technologies, Inc., 42 Conn.App. 109, 113-14, 679 A.2d 372 (1996). Therefore, its proper interpretation is a matter of law.

In the present case, the proposal dated June 16, 1989, sets forth the scope of the contracts. In this original contract, the plaintiff's basic scope of services in section one, parts one through nine, are to be paid pursuant to section three, part one, under fees, schedules, and payment. In return for the plaintiff's providing the services described in section one, parts one through nine, the defendant was to pay the plaintiff the fixed sum of $24,000. This figure and the scope of services in section one, parts one through nine, was not amended by any of the succeeding contract amendments between the parties. Moreover, there was no question of the plaintiff's performance of sections one through nine.

Part ten, under section one's basic scope of services, was to be paid pursuant to section three, part two, under fees, schedules, and payment. The rate used for these services is per diem according to the plaintiff's current hourly rate schedule. The $2000 budget is suggested but was permitted to change as the scope of the project was defined. This rate was never changed from the per diem rate based on the plaintiff's hourly rate. The contract also stated that payment was due thirty days after the defendant was billed on the first invoice.

The amendment to the first proposal, which was also dated on June 16, 1989, and executed by both parties, modified the payment schedule and reduced the retainer to $2000. That amendment expressly states that all other items of the contract are to remain in full effect.

The letter from the defendant to the plaintiff dated February 8, 1990, described the change in services pursuant to section one, part ten, of the basic scope of services. This agreement, which was executed by both parties, also increased the budget for this service from $2000 to $8000. In addition, payment was to be paid in full at the time of financing the project. This letter clarified and increased the scope of services in section one, part ten, of the basic scope of services, and was accepted by both parties.

We conclude that there was no ambiguity in the second sentence of section three, part two, of the contract. This sentence merely suggested a budget of $2000 for the work performed under part ten of the basic scope of services. This sentence also stated that the...