Wadia Enterprises, Inc. v. Hirschfeld

Decision Date06 May 1992
Docket NumberNo. 10477,10477
Citation604 A.2d 1339,27 Conn.App. 162
CourtConnecticut Court of Appeals
PartiesWADIA ENTERPRISES, INC. v. Caroline HIRSCHFELD et al.

Robert A. Slavitt, with whom was Michael J. Lawrence, Norwalk, for appellant (plaintiff).

Michael D. Bromley, with whom, on the brief, was Burt M. Hoffman, Stamford, for appellees (defendants).

Before DUPONT, C.J., and NORCOTT and LAVERY, JJ.

NORCOTT, Judge.

The plaintiff corporation appeals from the trial court's granting of the defendants' motion for summary judgment. The plaintiff claims that the trial court improperly concluded that (1) the plaintiff failed to raise any genuine factual issue regarding whether the defendants acted in bad faith, or waived or became estopped to assert the protection of the Home Improvement Act, General Statutes § 20-418 et seq. (the Act), (2) there was no issue of material fact regarding the existence of the notice of cancellation that the Act requires, and (3) there was no factual issue regarding whether the defendants consented to work performed, thereby barring them from recovering under the Act. We affirm the trial court's judgment.

The record discloses the following facts. In August, 1989, the parties entered into a detailed, written contract for the renovation of and addition to the defendants' house in Greenwich. The contract was prepared by the defendants' architect and New York attorneys before being presented to the plaintiff for execution. Relevant parts of the contract provided for payment of $599,314.80, substantial completion of the project 170 days after the building permit was obtained, a penalty clause of $500 per day for failure to complete the project within the time provided in the contract, supervision of the project by the defendants' architect, the defendants' retention of 5 percent of each installment payment until the architect's certification of the completion of the job, and the right to submit any disputes to arbitration upon the parties' mutual agreement. It is not disputed that this contract was a home improvement contract within the meaning of the Act. The contract did, however, fail to provide specifically for a notice of cancellation pursuant to General Statutes § 20-429(a)(6).

On September 14, 1989, the plaintiff submitted the first of ten requisitions for payment, the first nine of which were approved by the defendants' architect and paid to the plaintiff, minus the 5 percent retainage. On August 30, 1990, the architect approved and certified for payment the tenth and final requisition in the amount of $64,000. A total of $35,676 of this sum consisted of the amounts retained from the first nine payments the defendants made. The defendants, however, did not issue final payment. They instead asserted that sums due under the contract's liquidated damages clause were to be set off against the plaintiff's final requisition for payment. The defendants also did not agree to submit the dispute to arbitration.

Thereafter, the plaintiff caused a mechanic's lien to be filed on the Greenwich land records, and commenced the underlying action to foreclose that lien and for breach of contract. 1 On December 13, 1990, the defendants filed answers and special defenses, alleging that (1) payment in full had been made, (2) there was a failure of performance of the contract, and (3) that the contract violated the Act. Later, the plaintiff countered by filing an amended complaint, essentially alleging that the defendants' refusal to make final payment amounted to bad faith use of the Act. The defendants then sought summary judgment, claiming that the underlying contract was unenforceable pursuant to the requirement of General Statutes § 20-429(a)(6). 2 Thereafter, the trial court granted the defendants' motion. The court found that the contract was unenforceable, and that, because the plaintiff had failed to raise any genuine issue as to any material fact, the defendants were entitled to judgment as a matter of law.

The standards governing our review of a trial court's decision on a motion for summary judgment are clear. Practice Book § 384 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." See Connecticut Bank & Trust Co. v. Carriage Lane Associates, 219 Conn. 772, 780-81, 595 A.2d 334 (1991); Lees v. Middlesex Ins. Co., 219 Conn. 644, 650, 594 A.2d 952 (1991); Trotta v. Branford, 26 Conn.App. 407, 409, 601 A.2d 1036 (1992). While the burden of showing the nonexistence of any material fact is on the party seeking summary judgment; see D.H.R. Construction Co. v. Donnelly, 180 Conn. 430, 434, 429 A.2d 908 (1980); "the party opposing [summary judgment] must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosi

ng the existence of such an issue." (Internal quotation marks omitted.) Bassin v. Stamford, 26 Conn.App. 534, 537, 602 A.2d 1044 (1992). "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." Strada v. Connecticut Newspapers, Inc., 193 Conn. 313, 317, 477 A.2d 1005 (1984). "The test is whether a party would be entitled to a directed verdict on the same facts." (Internal quotation marks omitted.) Trotta v. Branford, supra, 26 Conn.App. at 410, 601 A.2d 1036.

We first consider the plaintiff's claim that the trial court improperly determined that no genuine issue of material fact existed as to whether the contract is violative of the Act with respect to notice of cancellation. The plaintiff argues that the notice is contained in the contract's provision that work was to commence seven days after the plaintiff obtained a building permit. The plaintiff contends that a genuine issue of material fact exists as to the notice requirement because the contract, as drafted by the defendants, states that the work to be performed shall commence seven days after a building permit is obtained and the contract is executed, a time period greater than the statutorily required three day cancellation period in which the agreement could have been rescinded.

General Statutes § 20-429 provides that "[n]o home improvement contract shall be valid or enforceable against an owner unless it ... contains a notice of the owners' cancellation rights in accordance with the provisions of the [Home Solicitation Sales Act, General Statutes § 42-134a et seq.]" General Statutes § 42-135a requires that home solicitation sales contracts contain specific language that consumers have three business days in which to cancel the contract. To provide that work is to commence within seven days says nothing about the right to cancel a contract. Because the contract at issue did not contain the specific language required by General Statutes § 20-429, the trial court therefore correctly determined that the notice provision was missing and that the contract was violative of the Home Improvement Act.

We next turn to the plaintiff's claim that the trial court improperly determined that no genuine issue of material fact existed as to its claim that the defendants acted in bad faith in seeking to use the Act as a defense. The plaintiff contractor maintains that by virtue of its pleadings and affidavit in support of its opposition to the motion for summary judgment, it raised a genuine issue of a material fact as to the defendants' alleged bad faith claim, which, if proven, provides an exception to the now established general rule that precludes recovery by a contractor who has failed to comply with the Act's requirements.

In a series of related cases, our Supreme Court recently held that defective home improvement contracts are unenforceable under almost every imaginable theory of recovery. See Barrett Builders v. Miller, 215 Conn. 316, 576 A.2d 455 (1990) (quasi contract); A. Secondino & Son, Inc. v. LoRicco, 215 Conn. 336, 576 A.2d 464, 576 A.2d 464 (1990) (quantum meruit and unjust enrichment); Liljedahl Bros., Inc. v. Grigsby, 215 Conn. 345, 576 A.2d 149 (1990) (implied contract). Although the court clearly stated that defective home improvement contracts are invalid and unenforceable as a matter of public policy so as to afford protection to consumers, it also recognized that disallowing all of these invalid contracts "may lead to a harsh result." Barrett Builders v. Miller, supra, 215 Conn. at 326, 576 A.2d 455. The court stated that the legislature might do well to contemplate the possibility that some inexperienced contractors may encounter unscrupulous homeowners who use the Act "as a sword rather than as a shield." Id., at 328, 576 A.2d 455. 3 It suggested that bad faith on the part of a homeowner might preclude use of the Act as a defense. Id.; see also A. Secondino & Son v. LoRicco, supra, 215 Conn. at 340, 576 A.2d 464.

Here, the plaintiff contends it has sufficiently raised a genuine issue of material fact as to the defendants' alleged bad faith claim that because the contract is invalid under the Act, the plaintiff may...

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    ...and failed to submit supporting documentation showing bad faith on the part of the defendants. See also Wadia Enterprises, Inc . v. Hirschfeld , 27 Conn. App. 162, 170, 604 A.2d 1339 ("[m]ere statements of legal conclusions ... and bald assertions, without more, are insufficient to raise a ......
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