DeOliveira v. Illescas, No. CV 01-0811770 (CT 5/10/2005), CV 01-0811770

CourtSupreme Court of Connecticut
Writing for the CourtHale
PartiesSergio DeOliveira v. Sonia Illescas Opinion No.: 88810.
Docket NumberNo. CV 01-0811770,CV 01-0811770
Decision Date10 May 2005

Page 1

Unpublished Opinion

Sergio DeOliveira
Sonia Illescas
Opinion No.: 88810.
No. CV 01-0811770
Superior Court of Connecticut
Judicial District of Hartford at Hartford
May 10, 2005


This is an action brought in two counts by Sergio Deoliveira, a contractor. The action is brought against the defendant, Sonia Illescas, a home owner. In the first count the plaintiff alleges the breach of a contract and in the second count, unjust enrichment. The plaintiff claims to have performed certain remodeling and repair work on the defendant's premises known as 522 Broadview Terrace, Hartford, Connecticut. The plaintiff alleges that in accordance with the contract he performed and provided materials for the total value of $16,082; that the defendant unilaterally terminated the contract and that the defendant paid $5,000 pursuant to the contract but has refused to pay the balance of $11,082. The defendant has filed an answer, special defense and counterclaim.

In the answer the defendant denies all essential allegations of the complaint. In the special defense the defendant alleges that the contract relied on by the plaintiff fails to conform to the provisions of the "Connecticut Home Improvement Act," Gen. Stat. §40-18, et seq. and therefore said document is not valid or enforceable.


On or about December 19, 2000, the plaintiff and the defendant executed a contract, a copy of which is attached to the complaint and marked Exhibit A. This contact is also in evidence as Plaintiff's Exhibit 2. It is undisputed in the facts stipulated by the parties in a former proceeding involving this case that the document relied upon by the plaintiff does not comply with the provisions of the Home Improvement Act (hereinafter "HIA").1 An examination of the document executed by the parties would disclose the violations of subsections 6 and 7. The evidence in this case also indicates a violation of section 3. The defendant maintains in her special defense that because of these violations the agreement between the parties is unenforceable. The plaintiff, however maintains that even though the agreement violates the HIA, it is still enforceable because federal law and regulations governing the 203(k) program under which the homeowner was obtaining her mortgage money preempts application of the Connecticut Home Improvement Act. The plaintiff provides considerable information regarding the 203(k) program through Exhibits 5 and 6 and a detailed analysis of same in his brief. The 203(k) program is authorized by the National Housing Act, 12 U.S.C. 1709(k), which states in Section 1 that the Secretary of the Department of Housing and Urban Development (hereinafter referred to as "HUD") may, in order to assist in the rehabilitation of one to four family structures used primarily for residential purposes, ensure and make commitments to ensure rehabilitation loans. The plaintiff relies to some extent on the fact that the contract drawn between the parties was put on a HUD form by a Mr. Rizzo who acted as a rehabilitation specialist governed by 24 C.F.R. 200.190, et seq. and 24 C.F.R. 203.50(1). HUD recommends that the homeowner have a consultant help prepare the exhibits to expedite the loan process and HUD required that inspections of the work be performed by a HUD approved fee inspector, a function which was to be provided by Mr. Rizzo who in fact made three inspections before leaving the premises on the ground that the work was not conforming to the contract. The plaintiff cites the supremacy clause of the Constitution of the United States, U.S. Constitution Article 6 C.L. 2 and several cases for the proposition that state law will be preempted if it stands as an obstacle to the accomplishment and execution of the full purpose and objective of Congress. He maintains that Congress's intent to supercede state law altogether may be inferred because the theme of federal regulations may be so pervasive as to make reasonable the inference that Congress left no room for the state to supplement it and Federal regulations have the same preemptive effect as federal statutes. The plaintiff maintains further that the comprehensive provisions established by the federal government for the 203(k) program indicates that Congress meant to preempt any state regulation of the HUD initiative to provide financing for the purchase and rehabilitation of run down residential housing. He claims that the Connecticut Home Improvement Act directly conflicts with the 203(k) program; that the act requires that the contractor shall provide and deliver to the owner the home improvement contract, while the HUD program states that it is the homeowner who is responsible for preparing the documents specifying the work to be completed and that where as here the homeowner employs a consultant, it is the consultant who is to prepare the cost estimate, work write-up and architectural exhibits required for the rehabilitation of the property.

The contractor further maintains that to require a HUD contractor to qualify under the HIA would necessitate making a second contract, one under the provisions of the 203(k) plan and the other to qualify under HIA and that this would penalize the contractor.

The contractor also maintains that applying the HIA to a case such as this does not accord with the legislature's intent in passing the act. He says the act protects the homeowner by invalidating any contract that did not adhere to the act's requirements but that no purpose is served by applying the act to construction work performed pursuant to the 203(k) program where the program has its own safeguards for protecting the consumer, since the work must be inspected and approved by a HUD consultant and the final payment of the contract cannot be made unless the homeowner states in writing that the work is complete and the consultant agrees. It is the plaintiff's position that to hold him to the HIA would be a great injustice when the plaintiff is not even being faulted for drafting an improper contract but for signing a contract that was presented to him by a homeowner acting through a federally approved consultant.

It is the opinion of this court that the federal government, acting through the HUD program, does not preempt application of the Connecticut Home Improvement Act. The HIA "is a remedial statute that was enacted for the purpose of providing the public with a form of consumer protection against unscrupulous home improvement contractors." Wright Brothers Builders, Inc. v. Dowling, 247 Conn. 218, 231 (1998). The HUD 203(k) program is an insurance program which provides protection for the lender not the borrower. This insurance is provided to induce lenders to loan money for the rehabilitation and construction of older property within certain limitations. Each program stands alone. One does not conflict with the other. While not directly...

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