Elec. Contractors, Inc. v. 50 Morgan Hospitality Grp., LLC

• Decision Date: 12 April 2022
• Docket Number: AC 44475
• Citation: 211 Conn.App. 724,273 A.3d 726
• Parties: ELECTRICAL CONTRACTORS, INC. v. 50 MORGAN HOSPITALITY GROUP, LLC, et al.
• Court: Connecticut Court of Appeals

211 Conn.App. 724

273 A.3d 726

ELECTRICAL CONTRACTORS, INC.

v.50 MORGAN HOSPITALITY GROUP, LLC, et al.

AC 44475

Appellate Court of Connecticut.

Argued January 3, 2022

Officially released April 12, 2022

Paul R. Fitzgerald, Hartford, for the appellant (plaintiff).

Edward R. Scofield, Bridgeport, with whom, on the brief, were Heather Spaide and Joseph J. Cessario, Stamford, for the appellee (defendant Greython Construction, LLC).

Alvord, Cradle and Lavine, Js.

LAVINE, J.

The plaintiff, Electrical Contractors, Inc., appeals from the summary judgment rendered by the trial court in favor of the defendant Greython Construction, LLC (Greython), regarding claims arising out of a contract between the plaintiff and Greython pursuant to which the plaintiff, as Greython's subcontractor, was to complete work on a property owned by the defendant 50 Morgan Hospitality Group, LLC (50 Morgan).¹ On appeal, the plaintiff claims that the court erred in granting Greython's motion for summary judgment (1) based on language in the contract providing that payment by 50 Morgan to Greython was a "condition precedent" to Greython's obligation to make payments to the plaintiff, and (2) because Greython failed to present any evidence demonstrating the absence of a genuine issue of material fact either that it was not the cause of 50 Morgan's failure to make payment or that it had made a substantive effort to collect payment. We disagree with the plaintiff and, accordingly, affirm the judgment of the court.

The record reveals the following relevant undisputed facts and procedural history. Greython served as the general contractor for a project involving the renovation of a property owned by 50 Morgan. The plaintiff served as a subcontractor for Greython. On or about February 3, 2017, Greython entered into a contract with the plaintiff in which the plaintiff agreed to "furnish all labor, material, and equipment to perform all [electrical] work" for the project. The plaintiff provided Greython with requisitions seeking payment for materials furnished and services provided in connection with the project.

At the heart of this appeal is the meaning of the following language of the contract between the plaintiff and Greython. Article 2 of the contract provides that Greython will pay the plaintiff fixed sums of money in accordance with article 6 of the contract. Article 6 provides in relevant part: "[The plaintiff] shall submit to [Greython] a requisition, on forms provided by [Greython] .... Partial payments shall be due following receipt of payment [from] [50 Morgan] to [Greython] in the amount of 95 [percent] of the material in place for which payment has been made to [Greython] by [50 Morgan]. [The plaintiff ] expressly agrees that payment by [50 Morgan ] to [Greython ] is a condition precedent to [Greython's ] obligation to make partial or final payments to [the plaintiff ] as provided in this paragraph. ..." (Emphasis added.)

On January 31, 2018, the plaintiff commenced this action seeking payment for the costs of the materials it had furnished and the services it had provided in connection with the renovation project. On July 6, 2018, the plaintiff filed the amended complaint, which is the operative complaint. In the complaint, the plaintiff alleged that it performed its obligations under the subcontract by providing labor, materials, and equipment for the project. Greython, however, failed to pay the plaintiff for all amounts due for the work it had completed on the project. The plaintiff asserted that "the sum of $350,616.65, plus attorney's fees, accrued interest, and costs remains due and owing to [the plaintiff]."

The plaintiff alleged the following relevant counts against Greython:² breach of contract for failing to pay the plaintiff the contract balance of $350,616.65 (count two); breach of the implied covenant of good faith and fair dealing for "failing to make payment of the sums due to [the plaintiff] that are not subject to a good faith dispute" and for "failing to provide notice or response to [the plaintiff] in good faith as to the specific, justifiable reasons for Greython's failure to make payment to [the plaintiff]" (count three); unjust enrichment (count four); and a violation of General Statutes § 42-158j for failure to pay the plaintiff any undisputed amount and refusing to place any disputed funds in escrow when it was put on notice of the plaintiff's claim (count six).³

On March 4, 2019, Greython filed an amended answer and special defenses to the operative complaint, in which it asserted two special defenses, both of which contended that the relevant language in article 6 made clear that Greython's obligation to pay the plaintiff was dependent upon Greython first receiving payment from 50 Morgan. On the same date, Greython filed a motion for summary judgment as to the second, third, fourth, and sixth counts of the operative complaint. Greython filed a memorandum of law in support of its motion, in which it argued that the language in article 6 of the contract was clear and unambiguous that it was not obligated to pay the plaintiff until it received payment from 50 Morgan. Because it had not yet received payment from 50 Morgan, Greython argued, "[it] ha[d] no duty to pay [the plaintiff] ...." On April 5, 2019, the plaintiff filed an objection to Greython's motion and an accompanying memorandum of law. The gist of the plaintiff's argument was that the payment provision in article 6 was ambiguous as to which party bore the risk of 50 Morgan's nonpayment. Thus, the plaintiff argued, this provision should be interpreted to mean that nonpayment by 50 Morgan "merely postpone[s] for a reasonable period of time" Greython's obligation to pay the plaintiff. On April 18, 2019, Greython filed a reply to the plaintiff's objection.

On April 24, 2019, the court heard oral argument on Greython's motion for summary judgment. On April 30, 2019, the court issued a memorandum of decision granting Greython's motion for summary judgment in its entirety as it pertained to the plaintiff. The court concluded that, pursuant to article 6 of the contract, Greython was not obligated to pay the plaintiff until 50 Morgan paid Greython. The court stated: "[The plaintiff] say[s] the court should read the language at issue [in article 6 of the contract] to mean that [Greython] will pay [the plaintiff] within a reasonable period of time even if the owner never pays [Greython]." The court noted that "courts have deviated from this view and read into some contracts the reasonable time language based upon the implications of labelling a provision ... ‘pay-when-paid’ ... or ... [‘pay-if-paid’].⁴ But none of [their decisions] bind [the trial] court to do likewise." (Footnote added.) On the contrary, the court stated, "[t]he courts that do bind [the trial] court suggest that [a reviewing court] will see an obvious condition precedent and the risk bearing arrangement it reflects and enforce it."

The court further stated: "The obvious import of the contract language in this case is that if [Greython] never gets paid then neither do its subcontractors. Because [50 Morgan's] payment is labelled a condition precedent—a thing that must happen first—the contract needed no additional words to make this consequence clear to a reader of ordinary intelligence." (Emphasis in original.) The court concluded: "So [the plaintiff cannot]—under the present circumstances—win under the plain language of the contract."

Regarding the count alleging breach of the covenant of good faith and fair dealing, the court stated: "[T]he [plaintiff] certainly express[es] dissatisfaction with Greython's efforts [to collect payment from 50 Morgan] but [does not] offer any evidence sufficient to create an issue of fact over whether Greython acted in bad faith. Instead, [although] questions have been raised about Greython's efforts, the [plaintiff has] cited no evidence that could possibly support a claim that Greython has acted from some interested or sinister motive."

On May 15, 2019, the plaintiff, pursuant to Practice Book §§ 11-11 and 11-12, filed a "motion for reargument/reconsideration and articulation" of the court's decision on Greython's motion for summary judgment. On May 20, 2019, the court denied that motion. This appeal followed.⁵ Additional facts and procedural history will be set forth as necessary.

We begin by setting forth the relevant standard of review, which applies to both of the plaintiff's claims. "This court's standard of review for a motion for summary judgment is well established. Practice Book § [17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. ... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. ... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact. ... [I]ssue-finding, rather than issue-determination, is the key to the procedure. ... [T]he trial court does not sit as the trier of fact when ruling on a motion for summary judgment. ... [Its] function is not to decide issues of material fact, but rather to determine whether any such issues exist. ... Our review of the decision to grant a motion for summary judgment is plenary. ... We therefore must decide whether the court's conclusions were legally and logically correct and find support in the record." (Internal quotation marks omitted.) Buehler v. Newtown , 206 Conn. App. 472, 480–81, 262 A.3d 170 (2021).

I

The plaintiff first...