Kosinski v. Carr

• Decision Date: 20 January 2009
• Docket Number: No. 28981.,28981.
• Citation: 112 Conn.App. 203,962 A.2d 836
• Court: Connecticut Court of Appeals
• Parties: Janice Anne KOSINSKI v. Angela O. CARR.

962 A.2d 836

112 Conn.App. 203

Janice Anne KOSINSKI v. Angela O. CARR.

No. 28981.

Appellate Court of Connecticut.

Argued October 27, 2008.

Decided January 20, 2009.

Arthur C. Laske III, Fairfield, for the appellant (defendant).

Darcy S. McAlister, Darien, with whom was Mark R. Carta, for the appellee (plaintiff).

HARPER, LAVINE and PETERS, Js.

PETERS, J.

This case concerns a real estate transaction in which neither the warranty deed for the conveyance of the property nor the antecedent contract of sale disclosed that the defendant seller's title was restricted by a covenant of record that forbade subdivision of the property. It is undisputed that, because this restriction was an encumbrance on the property, the plaintiff buyer is entitled to recover damages for breach of warranty under the warranty deed. See Aczas v. Stuart Heights, Inc., 154 Conn. 54, 60, 221 A.2d 589 (1966). The defendant maintains, however, that the trial court improperly declined to hold that discovery of the restrictive covenant by the plaintiff's attorney prior to the closing barred the plaintiff from recovering additional damages for breach of the warranty contained in the contract for the sale of the property. In the absence of any evidence that this discovery was disclosed to the plaintiff until many years after the closing, the court rejected this contention. We agree with this ruling and the court's assessment of damages against the defendant. Accordingly, we affirm the judgment in favor of the plaintiff.

In an amended two count complaint filed July 7, 2005, the plaintiff, Janice Anne Kosinski, brought an action against the defendant, Angela O. Carr, to recover damages and attorney's fees for breach of warranty and breach of contract with respect to the conveyance of certain residential real estate in Norwalk. The plaintiff sought monetary damages to compensate for the failure of the defendant's warranty deed and of the underlying contract of sale to disclose the existence of a restrictive covenant that barred the plaintiff from subdividing the property into two building lots. The defendant denied her liability and filed a number of special defenses and a counterclaim including an allegation that timely discovery of the restrictive covenant by the plaintiff's attorney barred the plaintiff's reliance on this defect in the title. In response, the plaintiff denied that her attorney had disclosed his title review to her before the closing. After a trial to the court, the court found the issues in favor of the plaintiff. It awarded her damages of $100,000 for breach of warranty in the warranty deed and $96,041.74 in attorney's fees for breach of contract. In addition, the court awarded interest and costs to the plaintiff with respect to an offer of judgment filed by the plaintiff on June 22, 2004. See Practice Book (2004) § 17-18.

Although the defendant purports to be challenging many parts of the court's judgment, in this appeal she has pursued only three specific claims, none of which challenges the propriety of the court's award of $100,000 to the plaintiff on her claim of breach of warranty under the deed that conveyed the property to her.¹ Contesting only the court's award of attorney's fees for breach of contract, the defendant maintains that the court improperly (1) declined to hold that the plaintiff had constructive knowledge of the restrictive covenant of which her attorney had actual knowledge, (2) rejected her claim that the contract was unenforceable because there was no meeting of the minds with respect to the undisclosed restrictive covenant and (3) abused its discretion in setting the amount of attorney's fees that it awarded to the plaintiff. We disagree with each of these claims.

The court's careful and detailed memorandum of decision contains the following undisputed findings of fact. The defendant took title to the property in dispute following the death of her husband, Howard Carr. The property had been conveyed to her husband and his former wife in a 1955 deed that included a proviso that "the premises ... shall not be subdivided for the purposes of sale...." Attorney Howard Ignal represented the defendant during the settlement of her husband's estate and, in that connection, received a copy of the 1955 deed. Ignal also represented the defendant when she decided to sell the property to the plaintiff and largely prepared both the contract of purchase and sale and the subsequent warranty deed. Neither of these documents made any reference to the restrictions contained in the 1955 deed.²

The plaintiff and her husband, Robert Kosinski, were represented by attorney Paul D. Plotnick in this real estate transaction. Plotnick reviewed the contract for purchase and sale and added a rider thereto. Prior to the closing, when he searched the title to the property in the Norwalk land records, Plotnick noted the restrictive covenants in the 1955 deed. He did not, however, disclose the existence of this restriction to his clients, to the defendant or to Ignal. Ignal never asked Plotnick for this information.

In preparing the warranty deed conveying the property to the plaintiff, Ignal relied on a "title report" from Plotnick that referred to a lis pendens and to taxes, but did not contain any information about the subdivision restriction. Ignal did not review the terms of the 1955 deed that he had received from the defendant when she inherited the property, and he did not perform a title search.³

Following the plaintiff's purchase of the property, her husband made efforts to subdivide it. Although he succeeded in getting the necessary approval from the local planning and zoning commission, he subsequently learned about the deed restrictions in the plaintiff's chain of title. He then, for the first time, was informed about these restrictions by Plotnick. Fearing litigation, the plaintiff and her husband abandoned their subdivision plan.

In a determination that has not been challenged in this appeal, the court concluded that the plaintiff had sustained her burden of proof that the restriction in the 1955 deed was valid and enforceable. That showing entitled the plaintiff to recover damages of $100,000 for breach of the warranty deed to reflect the diminished value of property that cannot be subdivided. The court declined, however, to award either consequential or incidental damages to the plaintiff on this count of the complaint.

The court also determined that the plaintiff was entitled to recover damages on the second count of her complaint, in which she sought attorney's fees and costs in accordance with a provision for such damages in the contract of sale.⁴ The court's award of $96,041.74 reflected its decision to reduce the recoverable amount to reflect the legal work that did not arise out of enforcement of the contract.

The defendant's appeal challenges this award of attorney's fees on two grounds. She maintains that the court improperly (1) rejected her contention that Plotnick's actual knowledge of the undisclosed restriction on subdivision barred any contractual recovery by the plaintiff and (2) awarded attorney's fees that were excessive. We disagree.

I

The defendant has proffered two arguments for reversal of the court's award of any attorney's fees to the plaintiff. She maintains that the court improperly faulted the manner in which she asserted her defense of "unclean hands," in which she argued that the discovery of the restrictive covenant by Plotnick before the closing justified denial of a remedy to the plaintiff for breach of contract. She further maintains that, if the court properly had addressed the issue, she should have prevailed on the merits of her argument that the plaintiff should be held to have had constructive knowledge of information known to her attorney.

In its memorandum of decision, the court expressly declined to consider the merits of the defense of unclean hands because, in the operative pleadings, the defendant had alleged that Plotnick's title search improperly "failed to disclose" the encumbrance on the land records. The court observed that this allegation was the opposite of the argument "being made for the first time in the posttrial papers that attorney Plotnick did know of the encumbrance." The court further noted the absence of any posttrial effort by the defendant to amend her pleadings. Finally, on the merits of the defendant's claim, the court observed that there might be "countervailing arguments."⁵

On appeal, the defendant faults the court's decision by asserting that the defense of unclean hands need not be pleaded specially and by suggesting, at even greater length, that the court abused its discretion by failing, sua sponte, to order amendment of the pleadings to conform to the proof. The plaintiff properly disputes these claims by referring to the absence of supporting authority in the cases on which the defendant relies.⁶ We agree that the defendant has cited no persuasive authority for the proposition that, in the absence of a request on her own part, the court had an obligation to take the corrective action that she was warned to take and yet failed to take.⁷

The court's memorandum of decision does not identify the "countervailing arguments" that the court also considered in declining to rule on the defense of unclean hands. We note, however, that this defense is premised on the contention that the plaintiff had timely constructive knowledge of the restrictive covenant because Plot-nick discovered the restrictive covenant prior to the execution of the contract for the sale of the property. We agree with the plaintiff that the record does not support this contention. Plotnick testified that he conducted the title search after he had received the fully executed contract of sale.⁸ Consistent with this testimony, the court found that Plotnick conducted the search before the closing. There is, therefore, no finding that Plotnick's search predated the...