Plato Associates, LLC v. Envtl. Compliance Serv., Inc.

Decision Date09 November 2010
Docket NumberNo. 18404.,18404.
Citation9 A.3d 698,298 Conn. 852
PartiesPLATO ASSOCIATES, LLC v. ENVIRONMENTAL COMPLIANCE SERVICES, INC., et al.
CourtConnecticut Supreme Court

Nicholas J. Harding, Hartford, with whom, on the brief, was Justin M. Pawluk, for the appellant (plaintiff).

Sean C. Joanis, for the appellees (defendants).

ROGERS, C.J., and NORCOTT, KATZ, PALMER, VERTEFEUILLE, ZARELLA and McLACHLAN, Js.*

PALMER, J.

Under General Statutes § 52-584a (a),1 no action against an architect, professional engineer or land surveyor to recover damages for any defect in the design, planning or construction of an improvement to real property may be brought more than seven years after substantial completion of such improvement. The plaintiff, Plato Associates, LLC, appeals 2 from the judgment of the trial court rendered in favor of the defendants,Environmental Compliance Services, Inc. (ECS), and its manager, Michael E. Hopkins. The plaintiff contends that the trial court incorrectly concluded, first, that the limitation period contained in § 52-584a (a) is inapplicable to its breach of contract and negligence claims against the defendants and, second, that the plaintiff's claims are time barred by the statutes of limitation applicable generally to breach of contract and negligence claims. We conclude that the limitation period of § 52-584a (a) applies to the plaintiff's claims and, further, that the defendants have failed to establish that the plaintiff's claims are untimely under that statute. Accordingly, we reverse the judgment of the trial court.

The following undisputed facts and procedural history are relevant to our resolution of this appeal. In 2000, the plaintiff applied for a loan from New Haven Savings Bank (bank) to finance the acquisition of and improvements to real property located at 4 Pin Oak Drive 3 in the town of Branford (town). As a condition of the loan, the bank required an environmental site assessment (assessment) of the property so it could be determined whether the property constituted an "establishment" under the Connecticut Transfer Act (act), General Statutes § 22a-134 et seq.4 Theplaintiff subsequentlyentered into a contract with ECS to conduct an assessment of the property, the purpose of which was "to identify and record existing, potential or suspected conditions that may impose an environmental liability to, or restrict the use of, the [property]." The assessment included subsurface sampling of soil and water to determine if oil or other hazardous materials were present. As part of the assessment, the defendants made five borings on the property and, on September 19, 2000, installed two monitoring wells to evaluate the quality of subsurface soil and water. The wells were constructed of polyvinyl chloride (PVC) screen and casing pipes that were two inches in diameter, and the wellheads were described as "finished protective steel hand boxes in concrete collars." (Internal quotation marks omitted.)

On January 18, 2001, ECS issued a report, which was signed by Hopkins, a licensed professional engineer, in which the defendants concluded that the property was not an "establishment," as that term is defined under the act. 5 In reliance on the report, the plaintiff purchasedthe property and closed on a construction mortgage in the amount of $2,833,000. The first advancement under the loan totaled $1,952,000, which went toward the purchase of the property. At the time of the purchase, buildings and other improvements on the property were under constructionor in the process of repair. Under the terms of the loan, the bank agreed to make advances of principal on the loan as the work progressed, and once all of the work had been completed to the bank's satisfaction, the bank was to pay the balance necessary to cover the full loan amount, or such lesser amount as might be required to cover the cost of the completed improvements.6 In April, 2007, the defendants, in connection with a refinancing of the property, informed the plaintiff that they had discovered records indicating that thousands of gallons of hazardous waste had been generated on the property by a previous tenant and that, contrary to their earlier assessment, the property was in fact an "establishment" within the meaning of § 22a-134 (3).

The plaintiff commenced this action on August 31, 2007, claiming that the defendants had breached the parties' contract and that they had been negligent in their performance of the 2000 environmental assessment by failing to identify the property as an establishment.The defendants filed a motion for summary judgment, claiming that the plaintiff's breach of contract claims were barred 7 by the six year limitation period contained in General Statutes § 52-576(a) 8 and that its negligence claims were barred by the respective three and two year limitation periods of General Statutes §§ 52-577 9 and 52-584.10

In response to the defendants' motion for summary judgment, the plaintiff maintained, contrary to the position advanced by the defendants, that the seven year limitation period of § 52-584a (a) applies to all of the plaintiff's claims because the defendants had performed professional services in connection with improvements to real property. In particular, the plaintiff asserted that the defendants' services were performed in connection with the plaintiff's purchase of and subsequent improvements to the property and with the improvements to the property that the defendants themselves made on September 19, 2000, when they installed two monitoring wells to evaluate the environmental condition of theproperty. The plaintiff maintained, therefore, that the seven year limitation period of § 52-584a (a) began to run, at the earliest, on September 19, 2000, and, consequently, its action, which had been commenced on August 31, 2007, wastimely. In support of its contention, the plaintiff submitted the affidavit of Richard Perlman, then the president of Zaragon Holdings, Inc., the company that managed the plaintiff, stating that the defendants had installed the two monitoring wells on the property on September 19, 2000. In his affidavit, Perlman also stated that the monitoring wells and the assessment report were integral to the plaintiff's subsequent acquisition of and improvements to the property because, without the report, the bank would not have agreed to finance the purchase and improvements.

The defendants countered that § 52-584a (a) did not apply to the plaintiff's claims because (1) the defendants had not provided professional engineering services as contemplated by the statute, and (2) the defendants' activities were not performed in connection with an improvement to real property within the meaning of § 52-584a (a). In support of their contentions, the defendants relied on the affidavit of Hopkins, in which he stated that "[t]he ... [a]ssessment did not involve any professional engineering services" or "improvement[s]" to the property. Rather, the sole purpose of the ... [a]ssessment was to identify and record existing, potential or suspected conditions that may impose an environmental liability to, or restrict the use of, the property. The sole purpose of the monitoring wells and borings, both intended to be temporary structures, was to accomplish the overall purpose of ... [the environmental assessment]. Neither the monitoring wells nor the borings increased [the] value [of] the property."

The trial court granted the defendants' motion for summary judgment. In doing so, the court rejected the defendants' first contention, namely, that the defendantshad not provided professional engineering services, concluding, rather, that the affidavits and other materials submitted by the parties in connection with the summary judgment motion gave rise to a genuine issue of material fact concerning that claim. The court agreed, however, with the defendants' second contention that their activities were not performed in connection with an improvement to real property within the meaning of § 52-584a (a). Relying on this court's decision in Grigerik v. Sharpe, 247 Conn. 293, 721 A.2d 526 (1998), the trial court stated: "Only if the improvement [to] real property contemplated by the defendants' services is not completed because of the defect complained of by the plaintiff does § 52-584a [a] apply to the plaintiff's cause of action." The court concluded that, because the plaintiff had adduced no evidence to demonstrate that an improvement to property could not be completed as a result of the defendants' allegedly improper conduct, § 52-584a (a) did not apply to the plaintiff's claims. This appeal followed.

The plaintiff contends that the trial court properly concluded that there exists a genuine issue of material fact as to whether the defendants provided professional engineering services in performing the assessment in 2000 but that the court misinterpreted Grigerik in concluding that the defendants' services were not performed in connection with an improvement to real property within the meaning of § 52-584a (a). In support of the latter claim, the plaintiff contends that the defendants' services were performed not only in connection with improvements to the property that the plaintiff itself undertook but also in connection with the defendants' installation of the two monitoring wells. The defendants do not defend the trial court's reading of Grigerik11 but claim, instead, that the judgment of thetrialcourt may be affirmed on the alternative ground that, contrary to the conclusion of the trial court, the evidence definitively establishes that the defendants provided no professional engineering services to the plaintiff. The defendants also raise two additional alternative grounds for affirming the trial court's judgment: (1) the services they performed were not rendered in connection with an improvement to real property, as § 52-584a (a) requires, but, rather, in connection with the plaintiff's...

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