FCM Group, Inc. v. Miller, No. CV 00 0177754 (CT 10/6/2004)
| Decision Date | 06 October 2004 |
| Docket Number | No. CV 00 0177754,CV 00 0177754 |
| Court | Connecticut Supreme Court |
| Parties | The FCM Group, Inc. v. Jeffrey T. Miller et al. |
LEWIS, JUDGE TRIAL REFEREE.
This case involves a dispute about a building contract between the FCM Group, Inc. a general contractor, as plaintiff, and Jeffrey T. Miller, owner of premises at 134 Butternut Hollow Road in Greenwich, and his wife, Cheryl Miller, who also resides at said premises, as defendants.
In the first count of the four-count complaint, the plaintiff alleges that it signed a written contract dated June 11, 1998, to build the Millers a new home at 134 Butternut Hollow Road, Greenwich. The plaintiff also alleges that it began the job on June 11, 1998, finished on February 14, 2000, and filed a mechanic's lien for $343,351 on February 16, 2000. In the second count, the plaintiff alleges that it filed a second mechanic's lien for $30,761 on the same date. The plaintiff seeks a foreclosure of its two mechanic's liens. In the third count of the complaint, the plaintiff alleges that the defendants breached the contract between them in that the plaintiff had fully performed its obligations but the defendants refused to pay the balance due. In the fourth count, the plaintiff alleges that, as a result of the work it performed at the defendants' home, the defendants have been unjustly enriched. As to the third and fourth counts, the plaintiff seeks money damages.
The defendants denied the material allegations in the complaint and they also filed six special defenses and six "Set-Offs and Counter-Claims." In the first two special defenses, the defendants contend that the plaintiff failed to state either a "claim" or a "cause of action" upon which "relief may be granted." In the third and fourth special defenses, the defendants claim that the "alleged" agreement or contract between the plaintiff and the defendants was not enforceable and had been "amended/rescinded/novated or otherwise materially changed." In the fifth special defense, the defendants allege that the mechanic's liens were "illegal." In the sixth special defense, it is alleged that the plaintiff had been "fully or over paid."
In the first "Set-Off/Counter-Claim," the defendants contend that since Cheryl Miller did not own the subject premises and was not a party to the contract, she was not liable to the plaintiff. In the second and third "Set-Off/Counter-Claims" it is contended that the contract between the parties did not comply with General Statutes §20-418 et seq., the Connecticut Home Improvement Act (HIA) and that the plaintiff was not registered under General Statutes §20-417A, the New Home Construction Act. It is also alleged in these counts that the plaintiff signed a lien waiver and that "much of the claim" is covered by this waiver, and that, accordingly, the plaintiff has violated "C.G.S. §49-8 and/or §13" with respect to both of the mechanic's liens. In the fourth "Set-Off/Counter-Claim," the defendants again allege that the plaintiff has violated the HIA. In the fifth "Set-Off/Counter-Claim," the defendants claim that the plaintiff breached the contract by failing to properly perform its construction work in a "reasonable and timely" manner. It is also alleged in this count that the plaintiff breached the covenant of good faith and fair dealing by charging unreasonable prices, duplicate billing, and providing inferior materials, as examples. In the sixth and final "Set-Off/Counter-Claim," the defendants allege that the plaintiff's conduct violated General Statutes §42-110a et seq., the Connecticut Unfair Trade Practices Act (CUTPA).
On July 3, 2000, the defendants' motion to cite in Frank Mercede III as a "counter-defendant" was granted. The Millers then filed a separate "complaint" against Mercede dated August 11, 2000, followed by a "substitute cross-complaint" of February 5, 2001, and then, on April 16, 2001, a "revised cross-complaint" against Mercede containing eight counts. The first count of this latest revised "cross-complaint" alleges that Cheryl Miller should not have been sued because she is not a record owner of the subject premises and did not sign the contract with the plaintiff. The second and third counts relate to the two mechanic's liens that were filed and the defendants again claim that both are invalid because the plaintiff violated both the HIA and the New Home Construction Act. In the fourth and fifth counts, the defendants repeat their contention that the plaintiff violated the HIA and the New Home Construction Act. The sixth and seventh counts allege that the plaintiff breached the contract in a number of ways, including performing in an unworkmanlike manner, providing inferior materials, causing delays in performance, overbilling, demanding payment when not due, and failing to complete the project in a timely manner. In the eighth count, the defendants claim that the plaintiff violated CUTPA in that its conduct was "immoral, unethical, oppressive and/or unscrupulous."
The case was referred to Attorney Alfred H. Hoddinott, Jr., an attorney trial referee, pursuant to General Statutes §52-434(a)(4) and Practice Book §19-2A. The referee conducted an eight-day trial and submitted a nineteen-page report, as required by Practice Book §19-8, and a subsequent report on January 2, 2004, after the case had been remanded to him in order to evaluate and comment on the defendants' objections to his report and recommendations.
The attorney trial referee made the following factual findings: (1) the corporate plaintiff, although having only one employee, Mercede, "observed all requisite corporate formalities," and the plaintiff operated "in a corporate capacity at all times;" (2) the contract between the parties was a standard AIA agreement for an approximately 5,000 square foot new home, which was signed by the title owner of the subject premises, Jeffrey Miller, and was "valid, binding and enforceable;" (3) defendant Cheryl Miller "exercised virtually complete dominion and control" over the subject premises and hence was a "beneficial" and "equitable" owner thereof, and furthermore was "intimately involved in the project, and a major cause of the problems;" (4) the Millers, but particularly Cheryl Miller, ordered approximately 150 changes to the original contract, which resulted in "substantial delays on the job;" (5) during February of 2000, Cheryl Miller told Mercede that the Millers did not intend to make the final payment due on the contract, despite the plaintiff's attempts to complete the contract, and the fact that the plaintiff, according to the referee, "was ready, willing and able to do so;" (6) the Millers improperly attempted to terminate the contract without complying with the provisions for termination contained in Section 20.2 of the contract, i.e., seven days written notice and/or a certification by the architect that there was "sufficient cause" to do so; (7) the plaintiff's construction of this new home was performed in a workmanlike manner, despite the defendants' claim to the contrary; (8) at the time the defendants refused to make any further payments on the contract and ordered the plaintiff off the premises, the plaintiff had completed 95% of the work required on the new house; (9) the mechanic's lien of $30,761 filed by the plaintiff accurately reflected the difference between the contract price, including extras ordered by the defendants, of $809,399 and payments made by the defendants to the plaintiff, which totaled $778,638; (10) the amount contained in the mechanic's lien of $30,761 was due and owing at the time the Millers improperly breached their contract with the plaintiff; (11) pursuant to the terms of the contract,1 the Millers became obliged to bear the costs of "delays" in completing the project, in this case, 228 days of delay, i.e., 75 delay days for failure to timely obtain a wetlands permit, and 153 days "occasioned by delay of the project;" (12) based on the plaintiff's daily profit margin and overhead expenses, the plaintiff was entitled to recover $232,425 for damages caused by delays in completing the contract which were attributable to the Millers; (13) based on the amount of money due and owing at the time the defendants breached the contract, the plaintiff suffered a "loss of profits" in the amount of $3,660; (14) the Millers' claim for damages had not been proved by credible evidence; and (15) Frank Mercede's testimony was "credible" and that of the Millers "was not."
Based on these findings of fact, the attorney trial referee concluded that: (1) the Millers caused an anticipatory breach of the contract when Cheryl Miller advised the plaintiff that the defendants did not intend to make any further payments; (2) the plaintiff was entitled to recover from both defendants the total amount of $236,086 for loss of profits and for damages caused by the Millers delaying completion of the project; (3) the lien filed by the plaintiff in the amount of $343,351 was not valid because it did not reflect the contract price as required by General Statutes §49-36, and was substantially in excess of the amount of damages recommended by the referee; (4) because of that violation, the corporate "veil" should be "pierced" as to the individual defendant, Mercede, on that claim only and the defendants are entitled to a $5,000 set off in accordance with General Statutes §§49-13 and 49-8; (5) the Home Improvement Act does not apply as the plaintiff constructed a new home for the defendants; (6) the New Home Construction Act does not apply to this case because the contract between the parties was dated June 11, 1998, and the effective date of the act was October 1, 1999, and the fact that one revision and a proposed change order were executed or proposed after the effective date of the act were irrelevant because the change orders did not "materially change the...
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