Walpole Woodworkers, Inc. v. Manning

• Decision Date: 18 December 2012
• Docket Number: No. 18778.,18778.
• Citation: 57 A.3d 730,307 Conn. 582
• Court: Connecticut Supreme Court
• Parties: WALPOLE WOODWORKERS, INC. v. Sid MANNING.

307 Conn. 582

57 A.3d 730

WALPOLE WOODWORKERS, INC.

v.Sid MANNING.

No. 18778.

Supreme Court of Connecticut.

Argued Sept. 28, 2012.

Decided Dec. 18, 2012.

David L. Gussak, Farmington, for the appellant (defendant).

Brent M. Stratton, for the appellee (plaintiff).

ROGERS, C.J., and NORCOTT, PALMER, ZARELLA, EVELEIGH and HARPER, Js.^*

ROGERS, C.J.

The sole issue in this appeal is the measure of damages that a contractor who fails to meet certain requirements of the Home Improvement Act (act), General Statutes (Rev. to 2003) § 20–429 et seq., may recover in quantum meruit when the homeowner invokes the act in bad faith. We hold that, on the facts of this case, the unpaid balance of the contract price is an appropriate measure of damages in restitution, and we affirm the decision of the Appellate Court.

The following facts and procedural history are relevant to this appeal. The parties entered into a written contract for $22,318, under which the plaintiff, Walpole Woodworkers, Inc., agreed to install a fence around certain real property owned by the defendant, Sid Manning. In addition, the contract contained provisions by which the defendant agreed to pay all past due sums, attorney's fees, interest, and costs if he failed to pay pursuant to the terms of the contract. The contract did not contain a starting date or a completion date. The defendant paid a deposit of $11,000 upon execution of the contract and the plaintiff substantially completed the fence installation in November, 2004. Thereafter, in May, 2005, the plaintiff sought payment of the balance owed on the contract. The defendant refused to pay, stating for the first time that his small dog could escape under the fence. The plaintiff designed a free “fix” for the problem, but was unable to install it for six months because the parties could not agree on a date for the work. The “fix” was completed in November, 2006, but the defendant still refused to pay the balance due.

The plaintiff filed its action in May, 2007, alleging that it had performed all of its contractual obligations, and seeking the balance due on the contract, as well as attorney's fees and interest as provided in the agreement. The defendant answered, inter alia, that he was not liable under the contract because the plaintiff had failed to comply with § 20–429(a)(7)¹ of the act, which requires contracts to contain a starting and completion date.² The plaintiff responded that the defendant had raised the act in bad faith.

The attorney fact finder agreed with the defendant that the contract did not comply with § 20–429(a)(7)because it did not contain a starting or completion date.³ The fact finder determined, however, under Habetz v. Condon, 224 Conn. 231, 618 A.2d 501 (1992), that the defendant had invoked the act in bad faith, and recommended that the court render judgment in favor of the plaintiff for the balance due, as well as for attorney's fees, costs, and interest pursuant to the contract. Subsequently the trial court rendered judgment in favor of the plaintiff, after reducing the amount of the attorney's fees award pursuant to General Statutes § 42–150aa (b).⁴ On the defendant's appeal, the Appellate Court reversed the award of attorney's fees, costs, and interest, but otherwise directed judgment in favor of the plaintiff for the balance due under the bad faith doctrine. Walpole Woodworkers, Inc. v. Manning, 126 Conn.App. 94, 110, 11 A.3d 165 (2011).⁵ This certified appeal followed.⁶

I

We briefly outline the contours of the statutory scheme governing home improvement contract disputes.Section 20–429(a) provides that no home improvement contract shall be valid or enforceable against a homeowner unless it contains certain enumerated criteria.⁷ “The aim of the [act] is to promote understanding on the part of consumers with respect to the terms of home improvement contracts and their right to cancel such contracts so as to allow them to make informed decisions when purchasing home improvement services.” Wright Bros. Builders, Inc. v. Dowling, 247 Conn. 218, 231, 720 A.2d 235 (1998).

In Barrett Builders v. Miller, 215 Conn. 316, 328, 576 A.2d 455 (1990), this court held that a contractor who did not comply with the written contract requirement of the act could not recover in restitution. This result was subsequently modified by one common-law and one statutory exception. First, in Habetz v. Condon, supra, 224 Conn. at 240, 618 A.2d 501, this court held that contractors may recover in restitution despite noncompliance with § 20–429(a), when homeowners invoke the protections of the act in bad faith. Subsequently, the legislature enacted No. 93–215, § 1, of the 1993 Public Acts, now codified as § 20–429(f), which allows recovery of payment for work performed “based on the reasonable value of services which were requested by the owner” for partial noncompliance with certain requirements of the act when “the court determines that it would be inequitable to deny such recovery.” ⁸ Thus, both Habetzand § 20–429(f) provide for recovery in quantum meruit despite a contractor's noncompliance with certain statutory requirements.⁹

II

The issue in the present case is narrow. The defendant does not contest the trial court's finding that he invoked the act in bad faith, nor does he challenge the continuing vitality of the bad faith exception. ¹⁰ On appeal, the only issue before this court is the application of the principles of restitution to the particular facts of this case.

We begin with the standard of review. The determination of whether an equitable doctrine applies in a particular case is a question of law subject to plenary review. David M. Somers & Associates, P.C. v. Busch, 283 Conn. 396, 408, 927 A.2d 832 (2007). “The amount of damages available under [quantum meruit and unjust enrichment], if any, is [however] a question for the trier of fact.... The factual findings of a trial court must stand, therefore, unless they are clearly erroneous or involve an abuse of discretion.” (Citation omitted; internal quotation marks omitted.) Id., at 407, 927 A.2d 832;Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 283, 649 A.2d 518 (1994). Because damages under the bad faith exception are measured in restitution, we will reverse an award only “when there is no evidence in the record to support it ... or when although there is evidence to support it, [we are] on the entire evidence ... left with the definite and firm conviction that a mistake has been committed.” (Internal quotation marks omitted.) New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 487, 970 A.2d 592 (2009).

We now turn to the central issue in this appeal, the proper measure of damages in restitution under the bad faith exception. The measure of damages in restitution is the reasonable value of the benefit to the defendant. David M. Somers & Associates, P.C. v. Busch, supra, 283 Conn. at 408, 927 A.2d 832;New Hartford v. Connecticut Resources Recovery Authority, supra, 291 Conn. at 460, 970 A.2d 592 (“[t]he recovery of restitution may take several forms, including ... the payment of the monetary value of the defendant's gain” [citations omitted; internal quotation marks omitted] ). “[W]herever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract, restitution of the value of what has been given must be allowed.” 26 S. Williston, Contracts (4th Ed. Lord 2003) § 68:4, p. 57.

The measure of restitution is “essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another.... With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard.” (Citations omitted; internal quotation marks omitted.) Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., supra, 231 Conn. at 282–83, 649 A.2d 518.

A court may select from among several methods of determining the amount of recovery in restitution, depending on the circumstances and conduct of the parties in a particular case. New Hartford v. Connecticut Resources Recovery Authority, supra, 291 Conn. at 451, 970 A.2d 592. For example, the Restatement (Third) of Restitution and Unjust Enrichment lists the following measures of recovery: “(a) [T]he value of the benefit in advancing the purposes of the defendant, (b) the cost to the claimant of conferring the benefit, (c) the market value of the benefit, or (d) a price the defendant has expressed a willingness to pay, if the defendant's assent may be treated as valid on the question of price.” 2 Restatement (Third), Restitution and Unjust Enrichment § 49 (2011).¹¹

Although not directly enforceable under the contract, the contract price is evidence of the reasonable value of the benefit the defendant received from the plaintiff. In Habetz v. Condon, supra, 224 Conn. at 235, 618 A.2d 501, this court affirmed a judgment of $16,244 for the balance due on the contract plus extras performed at the homeowner's request, despite violations of § 20–429(a), when the defendant raised the act in bad faith. Although the recovery was in restitution, the balance due on the contract was sufficient evidence by which to measure the award. See id., at 233–35, 618 A.2d 501. This approach is consistent with the Restatement (Third), which provides that “[r]easonable value is normally the lesser of market value and a price the recipient has expressed a willingness to pay.” 2 Restatement (Third), supra, § 50(2)(b). Indeed, our restitution cases commonly use the contract price to calculate the benefit bestowed on the defendant. See, e.g., Hartford Whalers Hockey...