Johnson Elec. v. Salce Contracting

• Court: Connecticut Court of Appeals
• Writing for the Court: Peters
• Citation: Johnson Elec. v. Salce Contracting, 805 A.2d 735, 72 Conn.App. 342 (Conn. App. 2002)
• Decision Date: 17 September 2002
• Docket Number: No. 21509.,21509.
• Parties: JOHNSON ELECTRIC COMPANY, INC., v. SALCE CONTRACTING ASSOCIATES, INC.

805 A.2d 735

72 Conn.App. 342

JOHNSON ELECTRIC COMPANY, INC., v. SALCE CONTRACTING ASSOCIATES, INC.

No. 21509.

Appellate Court of Connecticut.

Argued May 28, 2002.

Decided September 17, 2002.

COPYRIGHT MATERIAL OMITTED

SCHALLER, MIHALAKOS and PETERS Js.

Anthony R. Minchella, with whom, on the brief, was Maximino Medina, Jr., for the appellant (plaintiff).

Paul A. Sobel, for the appellee (defendant).

PETERS, J.

Our Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA),¹ provides a remedy for a person who has sustained an ascertainable loss as a result of conduct that is immoral, unethical, oppressive or unscrupulous. The CUTPA claimant in this case is a subcontractor that was denied a subcontract even though the subcontractor had been named in the successful bid proposal of the general contractor. An attorney trial referee, relying on his extensive findings of fact, issued a report concluding that the subcontractor had proven a CUTPA violation. The trial court rejected the report of the attorney trial referee. The most important issue in this case is whether, as a matter of statutory interpretation, CUTPA requires a claimant to prove not only misconduct, but also a repeated course of misconduct. Because we agree with the claimant that a single instance of misconduct may be actionable, we reverse the judgment of the trial court.

The plaintiff subcontractor, Johnson Electric Company, Inc., filed a complaint against the defendant general contractor, Salce Contracting Associates, Inc., in which it alleged that the defendant had violated CUTPA by failing to award it a subcontract to do the electrical work on a Bridgeport school project. Despite the fact that the school project required a general contractor to "name its subs," the defendant denied that it owed any duty to the plaintiff. The trial court, without expressly challenging the findings of Mark J. Rosen, an attorney trial referee to whom the case had been referred, concluded that the plaintiff had not proven its CUTPA claim.

The plaintiff's appeal challenges the validity of the trial court's judgment with respect to both its fact-finding and its legal conclusions. Our basic standard of review of such claims is well established. "To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous. When, however, the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record." (Internal quotation marks omitted.) Wagner v. Clark Equipment Co., 259 Conn. 114, 122, 788 A.2d 83 (2002); Coady v. Martin, 65 Conn.App. 758, 764, 784 A.2d 897 (2001), cert. denied, 259 Conn. 905, 789 A.2d 993 (2002). We agree with the plaintiff in both respects.

I FACTUAL FINDINGS

The trial court's findings of fact were based entirely on the record of the proceedings before the attorney trial referee. Under these circumstances, application of the "clearly erroneous" test must reflect the special rules that govern judicial review of a report of an attorney referee. "While the reports of [attorney trial referees] in such cases are essentially of an advisory nature, it has not been the practice to disturb their findings when they are properly based upon evidence, in the absence of errors of law, and the parties have no right to demand that the court shall redetermine the fact thus found.... A reviewing authority may not substitute its findings for those of the trier of the facts. This principle applies no matter whether the reviewing authority is the Supreme Court ... the Appellate Court ... or the Superior Court reviewing the findings of ... attorney trial referees.... This court has articulated that attorney trial referees and factfinders share the same function ... whose determination of the facts is reviewable in accordance with well established procedures prior to the rendition of judgment by the court." (Citation omitted; internal quotation marks omitted.) Killion v. Davis, 257 Conn. 98, 102, 776 A.2d 456 (2001), quoting Elgar v. Elgar, 238 Conn. 839, 848-49, 679 A.2d 937 (1996); Seal Audio, Inc. v. Bozak, Inc., 199 Conn. 496, 508, 508 A.2d 415 (1986). "[T]he trial court may not retry the case and pass on the credibility of the witnesses...." Post Road Iron Works, Inc. v. Lexington Development Group, Inc., 54 Conn.App. 534, 541, 736 A.2d 923 (1999).

In accordance with this road map, to determine the propriety of the fact-finding of the trial court, we first must examine the fact-finding of the attorney trial referee. These facts are recited in the report that the plaintiff asked the court to accept.

The attorney trial referee made the following findings. He found that (1) the defendant, in its bid solicitation to construct the school, named the plaintiff as its electrical subcontractor because the municipality required all bids to "name your sub"; (2) in its bid solicitation, the defendant submitted a price for electrical work that was higher than the price that the plaintiff had quoted to the defendant; (3) subsequent to the award of the construction contract to the defendant, the defendant asked the plaintiff to reduce its price to reflect a lower bid price that the plaintiff had offered to a competing general contractor;² and (4) the defendant, having failed to receive the requested price reduction, entered into an electrical subcontract with another subcontractor.

With respect to the plaintiff's CUTPA claim, the attorney trial referee further found that the plaintiff "routinely provide[d] different bids to different general contractors based on a consideration of multiple factors including prior experience with different general contractors." He found that it was industry practice that the named subcontractors actually receive the work. He also found that it was unethical, unfair and inconsistent with normal industry practice for a contractor to engage in "bid shopping"³ among nonlisted subcontractors. Finally, he found that the defendant knew that the bid solicitation had a "name your sub" requirement.

Neither the trial court nor the defendant has challenged any of these findings of fact as being clearly erroneous. Instead, the court and the defendant have added facts that the attorney trial referee's report did not include. Only the court had the authority to add facts and its authority had to be exercised in accordance with Practice Book § 19-17(b). Pursuant to that section, the court could add a fact only if it was "admitted or undisputed ...."

We agree with the plaintiff that the court exceeded its authority. The court added two findings of fact. One was that the defendant's request to the plaintiff to lower its bid price was neither unfair nor coercive. The other was that the defendant had not been treated fairly and equally by the plaintiff. Our review of the report of the attorney trial referee and the testimony on which the report relies persuades us that neither of these added facts can accurately be characterized as admitted or undisputed. We will not consider them further.

The defendant does not claim that it had any authority to add findings to the report of the attorney trial referee. An appeal is not a trial de novo. Nonetheless, the defendant relies on testimony that is not reflected in the findings of fact of the attorney trial referee. To state the obvious, the attorney trial referee was not obligated to make additional findings, just as he was not obligated to find credible the testimony of the defendant's witnesses. No one other than the attorney trial referee is authorized to assess the credibility of the witnesses who appear before him. Post Road Iron Works, Inc. v. Lexington Development Group, Inc., supra, 54 Conn. at App. 541.

We must, therefore, disregard the defendant's repeated assertions, throughout its appellate brief, that the plaintiff's conduct was inequitable. On the record, it was not inequitable for the plaintiff to consider economic circumstances when it calculated the bid price that it quoted to the defendant. The plaintiff was not found to have engaged in bid rigging. The defendant's statements to the contrary serve only to confuse.

We conclude, therefore, that the findings of fact contained in the report of the attorney trial referee are dispositive. Our review of the legal conclusions of the trial court must be based on these findings and no others.

II CUTPA VIOLATION

As a matter of law, to establish a CUTPA violation, the plaintiff had to establish that it was injured by "unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes § 42-110b(a). The attorney trial referee so concluded.

The defendant maintains that the trial court properly came to the opposite conclusion. According to the court and the defendant, even if the refusal to enter into a subcontract with the plaintiff did not comport with an established trade practice and even if the plaintiff's conduct was entirely proper, the plaintiff has not satisfied the conditions that limit CUTPA relief. We disagree.

The court concluded that CUTPA was inapplicable because the dispute between the parties involved only (1) a single isolated instance that (2) did not implicate any specific and substantial public purpose. Because the court's conclusions concerned issues of law, our review is plenary. In our view, these objections to the report of the attorney trial referee are not well founded.

A Single Incident

The trial court held that, because the plaintiff did not prove that the defendant had engaged in a repeated course of misconduct, the plaintiff did not establish that the defendant violated CUTPA. The court characterized the present case as no more than a fact bound isolated incident. In the court's view, in order to prevail, the plaintiff would have had to show that this defendant regularly called the...