O & G Industries, Inc. v. American Home Assurance Co. ( 2021 )

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O AND G INDUSTRIES, INC. v. AMERICAN HOME
ASSURANCE COMPANY
(AC 43135)
Cradle, Alexander and Harper, Js.
Syllabus
The plaintiff, a concrete supply company, sought to recover payment under
certain surety bonds issued by the defendant, claiming that it had not
been paid the amount it was owed for supplying concrete and other
materials to the bonds’ principal, M Co. M Co. entered into a subcontrac-
tor agreement with C Co. to deliver and pour concrete for a construction
project. C Co. then engaged the plaintiff to supply concrete materials
to C Co. to comply with its subcontractor agreement. After receiving a
joint credit agreement and lien waiver from M Co., the plaintiff began
supplying concrete and sent invoices directly to M Co., which paid the
plaintiff in full. C Co. was unhappy with this arrangement and, thereafter,
the plaintiff opened an account with C Co., albeit for a different project.
Subsequently, the plaintiff continued to provide C Co. with concrete
and charged C Co. directly; however, C Co. did not pay the plaintiff.
The plaintiff informed M Co. of C Co.’s nonpayment and M Co. provided
payment to C Co. to forward to the plaintiff, but C Co. failed to do so.
After C Co. defaulted, the plaintiff sent the defendant a notice of claim
under the payment bond, and recorded a mechanic’s lien against the
owner of the construction project. The defendant issued a substitute
bond, as a surety, which the plaintiff accepted as a substitute for its
mechanic’s lien. Thereafter, M Co. issued a response to the defendant
in which it denied that the plaintiff’s claim had any merit. The defendant
refused to pay the plaintiff under the payment bond or the substitute
bond, and the plaintiff brought the present action against the defendant.
The defendant asserted nine special defenses against the plaintiff, alleg-
ing, inter alia, that the plaintiff acted in bad faith and was reckless in
its dealings with C Co. Held:
1. The trial court did not err in finding that the defendant failed to sustain
its burden of proof in showing that the plaintiff conducted its business
with C Co. recklessly, in bad faith, or with a dishonest purpose in
providing C Co. with its own account, not demanding payment immedi-
ately upon default, or bringing an action on the unpaid balance, as the
court’s factual findings and the evidence in the record supported the
court’s conclusions; the plaintiff was not a party to the payment bond
agreement, the plaintiff took more protective steps than the defendant,
which had failed to include any provisions in its bond agreement to
require M Co., who brought C Co. into the construction project, to
complete credit checks on subcontractors before bringing them
onboard, the plaintiff did not act recklessly where it took reasonable
steps to execute a joint check agreement with M Co., M Co. was on
notice that C Co. had not been forwarding payment to the plaintiff, yet
M Co. continued advancing payment for the materials directly to C Co.,
and there was sufficient evidence to support the court’s finding that the
plaintiff’s conduct in continuing to supply materials to C Co. for the
project did not rise to the level of common-law recklessness.
2. The defendant cannot prevail on its claim that the trial court erred in
finding that the plaintiff satisfied the express condition precedent to a
valid claim as delineated in the payment bond, namely, that the plaintiff
provide the defendant with a copy of the plaintiff’s written contract or
purchase order with C Co., as the court’s finding that the forty-five
invoices submitted to the defendant, which set forth the relationship
between C Co. and the plaintiff, were sufficient to comply with the
provisions of the payment bond; there was no dispute that the plaintiff
supplied materials to C Co. for the construction project for which the
plaintiff was not paid, and the plaintiff attached the invoices with its
proof of claim form, indicating that C Co. and the plaintiff had an ongoing
agreement for the materials to be supplied to C Co. for the benefit of
the project; moreover, the payment bond failed to exclude any specific
type of agreements or to indicate that proof of certain types of agree-
ments were disallowed upon making a claim.
3. This court declined to review the merits of the defendant’s claim that the
trial court erred by allowing the plaintiff to recover damages in excess
of the penal sum of the substitute bond; the defendant raised no objec-
tions at trial regarding the award of prejudgment or offer of compromise
interest as part of the damages award, or the court’s calculus of its award.
4. The trial court did not abuse its discretion by allowing the plaintiff to
present rebuttal evidence after the defendant rested without introducing
any evidence or testimony during its case-in-chief when the defendant
pleaded special defenses and partly geared its lengthy cross-examination
of the plaintiff’s sole witness toward addressing those special defenses;
because the court had the sound discretion as to the order of its proceed-
ings and because the court had barred the plaintiff from addressing the
defendant’s special defenses in its case-in-chief on the basis that those
special defenses had not yet been raised, the court properly allowed
rebuttal evidence limited only to the defendant’s special defenses; the
plaintiff’s rebuttal was not presented to bolster its case-in-chief but,
rather, to refute or contradict the evidence the defendant put forth
during its cross-examination of the plaintiff’s witness concerning the
defendant’s special defenses, and the documents that the defendant
admitted during that cross-examination, which as the defendant con-
ceded, were evidence.
Argued November 9, 2020—officially released May 18, 2021
Procedural History
Action to recover damages for, inter alia, the defen-
dant’s denial of the plaintiff’s claim for failure of pay-
ment by a principal under certain bonds issued by the
defendant as surety, brought to the Superior Court in
the judicial district of Stamford-Norwalk, where it was
tried to the court, Tierney, J.; judgment for the plaintiff,
from which the defendant appealed to this court.
Affirmed.
Louis R. Pepe, with whom was Rory M. Farrell, for
the defendant (appellant).
Jared Cohane, with whom was Timothy T. Corey,
for the plaintiff (appellee).
Opinion
HARPER, J. The defendant, American Home Assur-
ance Company, appeals from the judgment of the trial
court rendered in favor of the plaintiff, O & G Industries,
Inc., finding that the plaintiff was entitled to payment
under certain bonds issued by the defendant as surety,
including a payment bond and a bond (substitute bond)
that had been substituted for the discharge of a mechan-
ic’s lien filed by the plaintiff in connection with materi-
als it had furnished for a construction project. On
appeal, the defendant claims that the court erred by (1)
failing to find that the plaintiff breached its obligation
of ‘‘diligence and utmost good faith’’ owed to the defen-
dant, (2) finding that the plaintiff satisfied the condition
precedent to the payment bond, (3) allowing the plain-
tiff to recover beyond the penal sum of the mechanic’s
lien bond, and (4) allowing the plaintiff to put on a
rebuttal case after the defendant had rested its case
without calling any witnesses or introducing any evi-
dence.1 We disagree and, accordingly, affirm the judg-
ment of the trial court.
The following facts, either found by the court or
undisputed in the record, and procedural history are
relevant to our resolution of this appeal. The plaintiff
is a producer and supplier of construction materials,
including concrete, with a place of business in Torring-
ton. A large scale, eighteen-story residential apartment
building construction project (project) in Stamford
commenced at 1011 Washington Boulevard, which is
owned by Stamford Phase Four JV, LLC (owner). The
owner and The Morganti Group, Inc. (Morganti), the
general contractor, entered into a construction contract
on January 28, 2016. The first executed payment bond
was an agreement between the owner as the obligee,
Morganti as the principal, and the defendant as the
surety. The defendant served as surety on the payment
bond and a performance bond. Those bonds were
issued by the defendant, each in the penal sum of
$53,690,000, naming Morganti as the bonded principal.
On January 31, 2016, Morganti entered into a written
subcontractor agreement with Concrete Superstruc-
tures, Inc. (CSS), of Bloomfield. Morganti hired CSS to
deliver and pour concrete for the project. The subcon-
tract price was $3,710,000. CSS then contacted the plain-
tiff and requested that the plaintiff supply materials to
CSS so that CSS could fulfill its obligations to Morganti
under the subcontractor agreement. CSS submitted a
credit application and credit agreement to the plaintiff
in April, 2016, after receiving a price quotation from
the plaintiff. The Redi-Mix price quotation provided CSS
with a list of items for sale, their prices, and payment
and billing information. The credit agreement included
the billing and credit conditions that governed the
agreement between CSS and the plaintiff. The plaintiff
conducted a credit check on CSS and the personal guar-
antor, Douglas Cartelli, and decided not to extend credit
to CSS for the project at that time and put the applica-
tion aside. In July, 2016, Morganti sent the plaintiff a
joint check agreement and lien waiver. The plaintiff
then supplied the concrete and other related materials
called for in the subcontract to CSS and delivered them
to the site from April until September, 2016. During
that time period, the plaintiff sent invoices directly to
Morganti for the materials and was paid in full by Mor-
ganti for a total value of $385,988. On July 20, 2016,
CSS e-mailed the plaintiff to express its displeasure
with the plaintiff’s choice to continue to bill Morganti
directly instead of directly dealing with CSS. CSS threat-
ened to use a different concrete supplier if the plaintiff
did not open an account for CSS and bill CSS directly.
The plaintiff then reconsidered CSS’ credit application
on August 11, 2016, and approved CSS for a credit
limit of $3000; however, the account was for a project
unrelated to the Washington Boulevard project at issue.
The joint check agreement previously sent to the plain-
tiff in July, 2016, was returned to Morganti in Septem-
ber, 2016, with amendments, including the redaction of
the lien waiver provision. While the amended joint
check agreement was under review by Morganti, the
plaintiff furnished construction supplies to CSS from
September 3 through December 2, 2016, for a total value
of $484,919.30, but charged CSS directly instead of Mor-
ganti. Morganti informed the plaintiff on November 1,
2016, that the plaintiff’s amended joint check agreement
had been denied. The plaintiff also informed Morganti
on or about November 1, 2016, that CSS had yet to pay
for any of the materials the plaintiff had furnished for
the project since September, 2016, with a total balance
owed of approximately $255,512. Morganti gave CSS
another $225,000 after being informed of the balance
due to the plaintiff, which had been paid timely up
until September, 2016. For each transaction between
September and December, 2016, CSS would request
payment from Morganti in order to pay the balance
owed to the plaintiff for the deliveries. Although Mor-
ganti made payments to CSS that CSS was supposed
to use to pay the plaintiff, CSS did not forward the
payments to the plaintiff. Consequently, CSS defaulted
after accruing a $484,919.30 balance that it owed to the
plaintiff.
The parties also stipulated to the following facts.
The materials delivered by the plaintiff to CSS from
September through December, 2016, were all billed to
CSS under a credit account that CSS had opened with
the plaintiff on or about August 11, 2016, for a project
that was taking place in Norwalk—the Wall Street The-
ater project.2 The delivery tickets and invoices showed
that the plaintiff’s supplies were sold to CSS only and
were not sold or delivered to any other party. It is
undisputed that CSS failed to pay the plaintiff for the
materials it delivered to the project between September
and December, 2016. Moreover, there is no dispute as
to the quality or value of the materials that the plaintiff
had delivered to CSS.
On February 2, 2017, the plaintiff mailed the defen-
dant a notice of claim under the payment bond after
CSS had defaulted. The plaintiff sent timely notice to
Morganti of its intent to file a mechanic’s lien. The
plaintiff then proceeded to record a mechanic’s lien
against the owner’s Washington Boulevard property on
February 28, 2017, to secure payment for the materials
that the plaintiff had provided to the project. There is
no dispute that the mechanic’s lien was filed timely. In
response, on March 6, 2017, the defendant issued the
substitute bond, as a surety, in the penal sum of
$533,411.23, which the plaintiff accepted as a substitute
for its mechanic’s lien pursuant to General Statutes
§ 49-37.3
On March 16, 2017, Morganti issued a response to the
defendant as to the plaintiff’s claim under the payment
bond, effectively denying that the plaintiff’s claim had
any merit. The defendant later denied the plaintiff’s
claim on April 6, 2017. After multiple correspondences
between the plaintiff and Morganti, the defendant sent
an e-mail on May 5, 2017, to the plaintiff and Morganti
affirming its decision to deny the plaintiff’s claim and
refused to pay the plaintiff under both the payment
bond and the substitute bond.
The plaintiff then brought this action against the
defendant, claiming that it had not been paid the amount
owed under the substitute bond of $484,919.30. As the
trial court delineated in its memorandum of decision,
‘‘[t]he operative complaint is the first amended com-
plaint dated July 25, 2017. . . . It is a two count com-
plaint with each count claiming damages in the same
amount of $484,919.30. The first count seeks that
amount of damages based upon a bond substituted for
the discharge of a $484,919.30 mechanic’s lien issued
by the plaintiff . . . on February 28, 2017. . . . The
defendant . . . supplied that bond on March 6, 2017
. . . in the amount of $533,411.23. The second count
is a suit against the defendant . . . by the plaintiff . . .
on [the] payment bond issued by [the defendant] as
surety to the project contractor . . . [Morganti] . . . .
The plaintiff claim[ed] damages on the second count
in the amount of $484,919.30 plus interest, costs and
attorney’s fees. The operative answer is the November
20, 2017 amended answer and special defenses. . . .
Nine special defenses have been asserted by [the defen-
dant] in [its] eleven page amended answer and special
defenses . . . .’’ (Citations omitted.)
In its nine special defenses, the defendant alleged that
(1) the plaintiff’s reckless conduct in how it conducted
business with CSS by allowing CSS to have its own
account, despite CSS being deemed not creditworthy,
and by failing to demand timely payments, exposed the
plaintiff, the defendant, Morganti, and the owner to an
unreasonable risk that CSS would run up a large, unpaid
balance, (2) the plaintiff’s claims were barred by the
doctrine of unclean hands as a result of the plaintiff’s
reckless, unreasonable, and unfair conduct, (3) the
plaintiff’s claims were barred by the doctrine of avoid-
able consequences and/or its failure to mitigate its dam-
ages, (4) the plaintiff’s claims were barred by the doc-
trine of estoppel, (5) the plaintiff’s claims were barred
by the doctrine of laches because it had failed to take
action to address the inability of CSS to submit timely
payments, (6) the plaintiff’s claims against the defen-
dant were barred in their entirety because both the
owner and Morganti, as bond principal for the defen-
dant, had paid in full for all of the concrete material
furnished by the plaintiff to CSS for the project, (7)
the plaintiff’s substitute bond claim was ‘‘barred to the
extent that its underlying mechanic’s lien was invalid
pursuant to [General Statutes] § 49-33 et seq. because
the lien amount [was] overstated and because no
amounts [were] due and owing [to the plaintiff] from the
owner, Morganti, or [the defendant],’’ (8) the plaintiff’s
payment bond claim was barred because the plaintiff
had not ‘‘submitted a valid ‘[c]laim’ in accordance with
the terms and conditions of the payment bond and,
therefore, [had] not satisfied all conditions precedent
to recovery under the payment bond,’’ and (9) the plain-
tiff’s claims were ‘‘barred, in whole or in part, because
the contract that [the plaintiff was] seeking to enforce
[was] an oral contract for the sale of goods in excess
of $500 and, therefore, unenforceable pursuant to . . .
[General Statutes] § 42a-2-201.’’4 In essence, the plaintiff
alleged in its complaint that it was not paid in full
by either CSS or Morganti. The plaintiff made a claim
against the defendant by reason of the defendant’s issu-
ance of the two bonds—the payment bond and the
substitute bond. After a five day trial, the court con-
cluded that the plaintiff had carried its burden and
proved that it was entitled to damages for breach of
the payment bond and the substitute bond, and that
the defendant’s first five special defenses, which were
equitable in nature, were not applicable to the plaintiff’s
claims at law on the surety bonds. Notwithstanding that
determination, the court did, in fact, examine the merits
of the defendant’s first five special defenses and found,
in the alternative, that the defendant had failed to sus-
tain its burden of establishing those special defenses.5
Specifically, the court found that the defendant failed to
sustain its burden of showing that the plaintiff’s conduct
amounted to common-law recklessness, bad faith, or
unclean hands. The court also found in favor of the
plaintiff as to the remaining special defenses. This
appeal followed. Additional facts and procedural his-
tory will be set forth as necessary.
I
The defendant claims that the court erred when it
found that the defendant had failed to sustain its burden
of proving that the plaintiff’s conduct was reckless and
unreasonable, and breached the obligation of ‘‘diligence
and the utmost good faith.’’ We disagree.
We set forth the appropriate standard of review and
relevant legal principles for this claim. A court’s factual
findings underlying its determination that a party failed
to sustain its burden of proof will not be disturbed on
appeal unless they are clearly erroneous. See Schiavone
v. Bank of America, N.A., 102 Conn. App. 301, 304, 925
A.2d 438 (2007); Kelman v. McDonald, 24 Conn. App.
398, 400–401, 588 A.2d 667 (1991). As such, ‘‘the court’s
finding that the [defendant] failed to meet [its] burden
of proof’’ must be ‘‘supported by facts in the record and
reasonable inferences drawn therefrom.’’ Schiavone v.
Bank of America, N.A., supra, 304. ‘‘On appeal, it is the
function of this court to determine whether the decision
of the trial court is clearly erroneous. . . . This
involves a two part function: where the legal conclu-
sions of the court are challenged, we must determine
whether they are legally and logically correct and
whether they find support in the facts set out in the
memorandum of decision; where the factual basis of
the court’s decision is challenged we must determine
whether the facts set out in the memorandum of deci-
sion are supported by the evidence or whether, in light
of the evidence and the pleadings in the whole record,
those facts are clearly erroneous.’’ (Citation omitted.)
Pandolphe’s Auto Parts, Inc. v. Manchester, 181 Conn.
217, 221–22, 435 A.2d 24 (1980).
‘‘We do not examine the record to determine whether
the trier of fact could have reached a conclusion other
than the one reached. Rather, we focus on the conclu-
sion of the trial court, as well as the method by which
it arrived at that conclusion, to determine whether it
is legally correct and factually supported.’’ Id., 222. ‘‘The
[fact-finding] function is vested in the trial court with
its unique opportunity to view the evidence presented
in a totality of circumstances, i.e., including its observa-
tions of the demeanor and conduct of the witnesses
and parties, which is not fully reflected in the cold,
printed record which is available to us.’’ (Internal quota-
tion marks omitted.) Cavolick v. DeSimone, 88 Conn.
App. 638, 646, 870 A.2d 1147, cert. denied, 274 Conn.
906, 876 A.2d 1198 (2005). ‘‘In reviewing the trial judge’s
factual findings, we give the evidence the most favor-
able reasonable construction in support of the judg-
ment.’’ (Internal quotation marks omitted.) Kelman v.
McDonald, supra, 24 Conn. App. 401. Further, ‘‘the
defendant bears the burden of proof on [its] special
defense(s).’’ Kaye v. Housman, 184 Conn. App. 808,
817, 195 A.3d 1168 (2018). The defendant must prove
the allegations in its special defenses by a fair prepon-
derance of the evidence in a civil trial. See Ramsay v.
Camrac, Inc., 96 Conn. App. 190, 206, 899 A.2d 727,
cert. denied, 280 Conn. 910, 908 A.2d 538 (2006).
The following facts and procedural history are rele-
vant to our resolution of this claim. The defendant’s first
five special defenses alleged that the plaintiff engaged
in reckless, unreasonable and unfair conduct, and that
the plaintiff’s claims were barred by the doctrines of
unclean hands, avoidable consequences and/or its fail-
ure to mitigate its damages, estoppel and laches. Special
defenses two through five incorporated the first special
defense by reference. Before the commencement of
trial, the court ordered the parties to file pretrial briefs
addressing their legal claims and applicable law. In its
pretrial brief, the defendant claimed, inter alia, that the
plaintiff was not entitled to recovery under the bonds
because the plaintiff had failed to exercise ‘‘diligence
and utmost good faith’’ by conducting business with
CSS in a ‘‘commercially unreasonable’’ manner. The
defendant also likened the requirement of ‘‘diligence
and utmost good faith’’ to the implied covenant of good
faith and fair dealing.
After a five day trial, in light of its factual findings,
the court found that the defendant had failed to sustain
its burden of proof as to its special defenses. In doing
so, the court determined that the defendant’s first five
special defenses were equitable in nature and could
be summarized as alleging that the plaintiff’s conduct
amounted to common-law recklessness, bad faith in the
performance of contractual obligations amounting to a
breach of the implied covenant of good faith and fair
dealing, and a violation of the equitable concept of
unclean hands. In its memorandum of decision, the
court discussed Aetna Bank v. Hollister, 55 Conn. 188,
212, 10 A. 550 (1886), and Wolthausen v. Trimpert, 93
Conn. 260, 269, 105 A. 687 (1919), cases on which the
defendant relied for its claim that the plaintiff’s reckless
conduct discharged the defendant of any duty to pay
the plaintiff under the surety bonds.
In its analysis, the court noted that neither of the
century old cases to which the defendant had cited
explained what the phrase ‘‘diligence and utmost good
faith’’ required. The court specifically noted that Wol-
thausen merely established when a party’s conduct is
not negligent under the ‘‘utmost good faith’’ standard.
The court determined that the defendant’s claim was
similar to the contractual principle of the implied cove-
nant of good faith and fair dealing enunciated in Pacelli
Bros. Transportation, Inc. v. Pacelli, 189 Conn. 401,
407, 456 A.2d 325 (1983), in which our Supreme Court
equated the phrase ‘‘utmost good faith’’ with ‘‘fair deal-
ing.’’6
The court thereafter explained that it had to deter-
mine ‘‘what standards must be shown by the defendant
to defeat the plaintiff’s claim upon the bond based on
the plaintiff’s omissions or commissions.’’ The court
determined that it would need to assess the plaintiff’s
conduct through the ‘‘lens of common-law recklessness,
unclean hands, and bad faith’’ to establish whether the
plaintiff was barred from recovery because the defen-
dant, in essence, alleged that the plaintiff’s conduct
discharged the defendant from any obligation to pay
under the surety bonds.7 (Internal quotation marks
omitted.)
Furthermore, the court explained that, because the
court in Pacelli likened ‘‘utmost good faith’’ to ‘‘fair
dealing,’’ the defendant would need to show that the
plaintiff had acted in bad faith amounting to a breach
of the implied covenant of good faith and fair dealing
where the defendant deemed the plaintiff’s conduct to
be ‘‘reckless,’’ ‘‘unfair,’’ and ‘‘unreasonable.’’ Thus, as
it pertained to the defendant’s claim that the plaintiff
breached the obligation of ‘‘diligence and the utmost
good faith,’’ the court determined that the defendant
had to show that the plaintiff acted in bad faith and that
a contract existed, which is also required to establish
a breach of the implied covenant of good faith and fair
dealing.
The defendant sought to establish that the plaintiff
acted in bad faith by engaging in reckless conduct in
its dealings with CSS. The court interpreted the defen-
dant’s claim that the plaintiff engaged in reckless con-
duct as an allegation rooted in common-law reckless-
ness. The court then concluded that the defendant failed
to show that the plaintiff’s conduct amounted to com-
mon-law recklessness. In support of that conclusion,
the court found that, because the plaintiff played no
part in bringing the defaulting party, CSS, into the con-
struction project, Morganti or the defendant should
have conducted credit checks on CSS. Moreover, the
plaintiff was not a party to a contract with the owner,
Morganti, or the defendant, as CSS was the party that
sought out the plaintiff, which sold and delivered the
materials and supplies to CSS only, and requested that
the plaintiff supply materials to CSS. Therefore, the
plaintiff had no contractual obligations to the defendant
outside of what it was required to submit for a valid
claim against the payment bond. Additionally, the court
found that the plaintiff’s failure to institute an action
against CSS was not unreasonable because there was
a compelling and reasonable inference created from
the evidence produced at trial that CSS was judgment
proof at the time its contract was terminated and there-
after. Thus, the court found that the defendant failed
to sustain its burden of proof as to the allegations of
common-law recklessness and bad faith by the plaintiff.
In essence, the court found that, because the defendant
failed to show that the plaintiff’s conduct amounted to
common-law recklessness, it failed to sustain its burden
of proof that the plaintiff acted in bad faith.
On appeal, the defendant claims that the court com-
mitted reversible error when it found that the plaintiff’s
conduct did not bar the plaintiff from recovering under
the surety bonds. The defendant relies on Aetna Bank
v. Hollister, supra, 55 Conn. 212, and Wolthausen v.
Trimpet, supra, 93 Conn. 269, in asserting that the plain-
tiff breached the standard of care owed to the defen-
dant. The defendant claims that the plaintiff’s reckless
conduct should discharge the defendant, as the surety,
from its obligation to pay the plaintiff under the surety
bonds because the court in Aetna Bank proclaimed that
‘‘diligence and the utmost good faith are required to be
observed by a party claiming against a surety.’’ Aetna
Bank v. Hollister, supra, 212. The plaintiff counters that
the cases cited by the defendant to buttress its argument
are more than a century old and were decided before
the development of modern construction suretyship
law. The plaintiff distinguishes Aetna Bank by demon-
strating that the court in Aetna Bank rejected the sure-
ty’s argument that it should be discharged from any
indemnity obligations for lack of notice when the bank
waited years before deciding to bring an action on the
bond The court in Aetna Bank rejected the surety’s
argument and found for the bank because the bond
contained no express notice requirement, and, thus, it
could not be said that the bank failed to adhere to a
‘‘duty of diligence and utmost good faith.’’ Id. In the
present case, the court determined that the defendant’s
reference to a duty of ‘‘diligence and the utmost good
faith’’ is comparable to the implied covenant of good
faith and fair dealing. We agree with the court’s well
reasoned analysis.
Because the defendant’s bad faith claim hinges on
whether the plaintiff’s conduct amounts to ‘‘unreason-
able’’ and reckless conduct, we first determine whether
the evidence in the record supports the court’s finding
that the plaintiff’s conduct did not amount to common-
law recklessness.
With regard to common-law recklessness, ‘‘[u]nder
Connecticut common law, [r]ecklessness requires a
conscious choice of a course of action either with
knowledge of the serious danger to others involved in
it or with knowledge of facts which would disclose this
danger to any reasonable [person], and the actor must
recognize that his conduct involves a risk substantially
greater . . . than that which is necessary to make his
conduct negligent. . . . [W]e have described reckless-
ness as a state of consciousness with reference to the
consequences of one’s acts. . . . It is more than negli-
gence, more than gross negligence. . . . The state of
mind amounting to recklessness may be inferred from
conduct. But, in order to infer it, there must be some-
thing more than a failure to exercise a reasonable
degree of watchfulness to avoid danger to others or to
take reasonable precautions to avoid injury to them.
. . . The result is that . . . reckless conduct tends to
take on the aspect of highly unreasonable conduct,
involving an extreme departure from ordinary care, in
a situation where a high degree of danger is apparent.’’
(Emphasis omitted; internal quotation marks omitted.)
Williams v. Housing Authority, 159 Conn. App. 679,
693–94, 124 A.3d 537 (2015), aff’d, 327 Conn. 338, 174
A.3d 137 (2017).
As the court in the present case noted, the blame the
defendant assigns to the plaintiff is misplaced. There
was sufficient evidence to support the court’s finding
that the plaintiff took more protective steps than the
defendant, who had failed to include any provisions in
its bond agreement to require Morganti, who brought
CSS into the fold, to complete credit checks on subcon-
tractors before bringing them onto the project. The
evidence shows that Morganti also had sent the plaintiff
a joint check agreement in July, 2016, which included
a provision stating that it would not give the plaintiff
any right ‘‘to file or maintain a lien or claim for alleged
nonpayment for any labor, materials or services per-
formed on the [p]roject, against the [o]wner . . . or
the [c]onstruction [m]anager or its sureties.’’ That provi-
sion, as found by the court, implicated the plaintiff’s
right to file a mechanic’s lien, which contravenes Gen-
eral Statutes § 42-158l.8 The plaintiff amended the joint
check agreement, redacted the portion of it that impli-
cated the plaintiff’s right to file a mechanic’s lien, and
returned the agreement to Morganti in September, 2016,
but Morganti refused to enter into the joint check agree-
ment with the plaintiff unless the plaintiff accepted the
redacted provision in the agreement.
The evidence in the record supports the finding that
the plaintiff did not act recklessly when the plaintiff
took reasonable steps to execute a joint check agree-
ment with Morganti. The joint check agreement would
have required Morganti to issue a check with both the
plaintiff and CSS identified as payees. Moreover, as the
testimony at trial established, Morganti was on notice
that CSS had not been forwarding payments to the
plaintiff by the fall of 2016, yet Morganti continued
advancing payment for the materials directly to CSS.
Accordingly, there was sufficient evidence to support
the court’s finding that the plaintiff’s conduct in continu-
ing to supply materials to CSS for the project did not
rise to the level of common-law recklessness.
Likewise, the evidence supports the court’s finding
that the defendant failed to sustain its burden of show-
ing that the plaintiff acted in bad faith. ‘‘[I]t is axiomatic
that the . . . duty of good faith and fair dealing is a
covenant implied into a contract or a contractual rela-
tionship. . . . In other words, every contract carries
an implied duty requiring that neither party do anything
that will injure the right of the other to receive the
benefits of the agreement. . . . The covenant of good
faith and fair dealing presupposes that the terms and
purpose of the contract are agreed upon by the parties
and that what is in dispute is a party’s discretionary
application or interpretation of a contract term. . . .
‘‘To constitute a breach of [the implied covenant of
good faith and fair dealing], the acts by which a defen-
dant allegedly impedes the plaintiff’s right to receive
benefits that he or she reasonably expected to receive
under the contract must have been taken in bad faith.
. . . Bad faith in general implies both actual or con-
structive fraud, or a design to mislead or deceive
another, or a neglect or refusal to fulfill some duty or
some contractual obligation, not prompted by an honest
mistake as to one’s rights or duties, but by some inter-
ested or sinister motive. . . . Bad faith means more
than mere negligence; it involves a dishonest pur-
pose. . . .
‘‘Accordingly, because the covenant of good faith and
fair dealing only requir[es] that neither party [to a con-
tract] do anything that will injure the right of the other
to receive the benefits of the agreement, it is not impli-
cated by conduct that does not impair contractual
rights.’’ (Citation omitted; internal quotation marks
omitted.) Capstone Building Corp. v. American Motor-
ists Ins. Co., 308 Conn. 760, 794–95, 67 A.3d 961 (2013).
‘‘[T]he existence of a contract between the parties is a
necessary antecedent to any claim of breach of the duty
of good faith and fair dealing.’’ Hoskins v. Titan Value
Equities Group, Inc., 252 Conn. 789, 793, 749 A.2d
1144 (2000).
The defendant relies on the plaintiff’s decision to
provide CSS with its own account and not to demand
payment immediately or to bring an action on the bal-
ance as indicia that the plaintiff failed to act in good
faith. That claim fails because, as the court noted, the
defendant had no contract with the plaintiff, nor did
the court find any facts to support the defendant’s claim
that the plaintiff acted in bad faith or with a dishonest
purpose.9
In summary, the court’s factual findings supporting
its conclusions that the defendant failed to show that
the plaintiff conducted its business with CSS recklessly,
in bad faith or with a dishonest purpose, and that the
plaintiff was not a party to the payment bond agreement
are fully supported by evidence in the record. Thus, we
agree with the court’s finding that the defendant failed
to sustain its burden of proof in showing that the plain-
tiff’s conduct was reckless and in bad faith. Accordingly,
the defendant’s claim must fail.
II
The defendant next claims that the court erred in
finding that the plaintiff satisfied the express condition
precedent to a valid claim as delineated in the payment
bond, namely, that the plaintiff provide the defendant
with a copy of the plaintiff’s written contract or pur-
chase order with the subcontractor, CSS. We are not
persuaded.
relevant legal principles. To the extent that we interpret
any of the payment bond provisions, ‘‘[i]f a contract is
unambiguous within its four corners, the determination
of what the parties intended by their contractual com-
mitments is a question of law. . . . When the language
of a contract is ambiguous, [however] the determination
of the parties’ intent is a question of fact, and the trial
court’s interpretation is subject to reversal on appeal
only if it is clearly erroneous. . . . In interpreting con-
tract items, we have repeatedly stated that the intent of
the parties is to be ascertained by a fair and reasonable
construction of the written words and that the language
used must be accorded its common, natural, and ordi-
nary meaning and usage where it can be sensibly applied
to the subject matter of the contract.’’ (Internal quota-
tion marks omitted.) Winthrop v. Winthrop, 189 Conn.
App. 576, 581–82, 207 A.3d 1109 (2019).
‘‘Whether the language is ambiguous is itself a ques-
tion of law, upon which our review on appeal is de
novo. . . . In determining whether a contract is ambig-
uous, the words of the contract must be given their
natural and ordinary meaning. . . . A contract is unam-
biguous when its language is clear and conveys a defi-
nite and precise intent. . . . Contract language is
unambiguous when it has a definite and precise mean-
ing about which there is no reasonable basis for a differ-
ence of opinion.’’ (Citation omitted; internal quotation
mark omitted.) Western Dermatology Consultants, P.C.
v. VitalWorks, Inc., 146 Conn. App. 169, 187, 78 A.3d
167 (2013), aff’d, 322 Conn. 541, 153 A.3d 574 (2016).10
Moreover, the determination that the plaintiff satis-
fied all of the conditions precedent to the payment bond
is a factual finding, ‘‘and it is axiomatic that [t]he trial
court’s [factual] findings are binding upon this court
unless they are clearly erroneous in light of the evidence
and the pleadings in the record as a whole. . . . We
cannot retry the facts or pass on the credibility of the
witnesses. . . . A finding of fact is clearly erroneous
when there is no evidence in the record to support it
. . . or when although there is evidence to support it,
the reviewing court on the entire evidence is left with
the definite and firm conviction that a mistake has been
committed.’’ (Internal quotation marks omitted.)
McKay v. Longman, 332 Conn. 394, 417, 211 A.3d 20(2019).
The following additional facts are relevant to this
claim. Section 16 of the payment bond agreement sets
out relevant definitions applicable to the payment bond.
Section 16.1 defines what constitutes a valid claim
under the payment bond and what is minimally required
to make a valid claim.11 The plaintiff sent the defendant
a notice of claim under the payment bond on February
2, 2017. On February 23, 2017, a representative for the
defendant sent the plaintiff a proof of claim form for
the plaintiff to complete in order to submit its claim.
The proof of claim form required, inter alia, information
about the claimant, a description of the services or
materials provided for the project, the dates of the deliv-
eries or services provided, the name of the contractor
or subcontractor that was furnished the services or
materials, a copy of invoices and delivery tickets, and
the amount due to the claimant. The plaintiff submitted
the proof of claim form on March 2, 2017. The plaintiff’s
proof of claim form also included, inter alia, an attach-
ment of forty-five unpaid invoices, which showed that
it had not been paid for the materials it had delivered
to CSS. Morganti disputed the claim by way of a letter
sent to the defendant’s claims representative on March
16, 2017, stating that the plaintiff’s bond claim was
without merit and that neither the defendant nor Mor-
ganti was liable to the plaintiff for any unpaid balances.
Specifically, Morganti’s response indicated that the
plaintiff’s claim should not be paid because the plaintiff
failed to include a copy of any contract or purchase
order between the plaintiff and CSS; therefore, it could
not be ascertained if the amount included on the form
submitted by the plaintiff was an accurate reflection of
the balance owed. The defendant thereafter denied the
plaintiff’s claim in a letter dated April 6, 2017, asserting
that it was denying the plaintiff’s claim because it was
‘‘not in a position to intercede [to] make payment of
the amounts claimed’’ because there appeared to be
‘‘legitimate issues of controversy between Morganti and
the [plaintiff].’’ The plaintiff sent the defendant a letter
dated April 10, 2017, contesting the bases set forth in
Morganti’s March 16, 2017 letter. Morganti then sent
the defendant’s claims representative a letter dated May
3, 2017, reiterating the reasons it believed the plaintiff’s
claim must be denied. The defendant confirmed its
denial of the plaintiff’s claim in an e-mail sent to the
plaintiff and Morganti on May 5, 2017.
At trial, Robert Jonke, the plaintiff’s credit manager
and sole testifying witness, testified that there was a
signed credit agreement between CSS and the plaintiff,
along with signed delivery tickets, invoices, and a price
quotation. Jonke also stated that each verbal order CSS
placed was confirmed by written delivery tickets, which
included a list of the materials ordered.
The court looked to the terms of the payment bond
and found that there was no condition in the agreement
stating that oral agreements were unacceptable, nor
was there a requirement that the agreement or contract
be executed in one single document. The court found
that the plaintiff had satisfied all of the conditions of
the payment bond. Particularly, the court found that
exhibit 51, which included the notice of claim, satisfied
‘‘items 1, 2, 4, 5, 6, 7, and 8 of § 16.1 of the payment
bond.’’ Moreover, the court found that item 3 of § 16.1
of the payment bond, which called for the submission
of a copy of an agreement or purchase order, was satis-
fied by exhibit 67, which included the signed delivery
tickets and invoices on the plaintiff’s business letter-
head. Additionally, the court found that the documents
contained in exhibits 5 and 6, which included the Redi-
Mix price quotation and materials price quotation, and
the credit agreement executed by CSS and the plaintiff,
also satisfied item 3 of § 16.1.12 The defendant claimed
that only invoices were submitted. Nevertheless, the
court found that the plaintiff established by a prepon-
derance of the evidence that there was indeed an agree-
ment between CSS and the plaintiff, and the documents
the plaintiff provided satisfied the condition precedent
of § 16.1 of the payment bond.
On appeal, the defendant claims that the court erred
in finding that the plaintiff fulfilled the prerequisite to
receiving payment under the payment bond.13 The
defendant contends that the plaintiff failed to furnish
any agreements or purchase orders between CSS and
the plaintiff. The defendant claims that § 16.1 of the
payment bond agreement requires all claimants, such
as the plaintiff, to submit at least a ‘‘copy of the agree-
ment or purchase order pursuant to which labor, materi-
als or equipment was furnished for use in performance
of the [c]onstruction [c]ontract . . . .’’ According to
the defendant, the plaintiff did not submit a written
document detailing the agreement between the plaintiff
and CSS for purchase of the materials, and the docu-
ments relied on by the court were not indicative of an
agreement. The defendant claims that neither the Redi-
Mix price quotation nor the materials price quotation
relied on by the court was signed by CSS. Moreover,
the defendant argues that many delivery tickets were
unsigned by CSS and the signed delivery tickets
included no terms and conditions of the sale so as to
constitute a written agreement. The defendant further
contends that the bulk of the documents on which the
court relied to establish a contractual relationship or
agreement between CSS and the plaintiff were never
submitted to the defendant. The defendant identifies
this as an indispensable condition precedent that bars
the plaintiff’s ability to recover because the defendant
is entitled to review the agreement between a subcon-
tractor and a supplier, such as the plaintiff. Finally, the
defendant takes issue with the fact that the agreement
between CSS and the plaintiff was ‘‘only an oral agree-
ment’’ and the plaintiff sent invoices instead of a written
agreement or purchase order.
‘‘Whether the performance of a certain act by a party
to a contract is a condition precedent to the duty of
the other party to act depends on the intent of the
parties as expressed in the contract and read in the
light of the circumstances surrounding the execution
of the instrument.’’ (Internal quotation marks omitted.)
Pack 2000, Inc. v. Cushman, 311 Conn. 662, 676–77,
89 A.3d 869 (2014). ‘‘A condition is an event, not certain
to occur, which must occur . . . before performance
under a contract becomes due. . . . If the condition is
not fulfilled, the right to enforce the contract does not
come into existence.’’ (Citation omitted; internal quota-
tion marks omitted.) Feinberg v. Berglewicz, 32 Conn.
App. 857, 860, 632 A.2d 709 (1993).
Jonke testified at trial that each order placed by CSS
was orally agreed to and memorialized or confirmed
by invoices and delivery tickets. Item 3 of § 16.1 of
the payment bond calls for a copy of an agreement or
purchase order that evidences the labor, materials or
equipment furnished for use in the project. It can rea-
sonably be inferred that the purpose of item 3 is for
the defendant to be provided with evidence that there
existed an agreement between the claimant and a con-
tractor or subcontractor to provide materials, labor,
or equipment for the project. The information in the
invoices identified CSS as the party receiving the labor,
materials or equipment; provided an itemized list with
a description of the services, materials or supplies deliv-
ered to CSS; and included the total price, the invoice
date, and where the delivery took place. The invoices
were also on the plaintiff’s letterhead. The invoices
submitted by the plaintiff set out exactly what materials
the plaintiff agreed to furnish to CSS. Item 3 of § 16.1
of the payment bond makes no mention of a require-
ment of a written agreement being necessary for the
claim to be deemed valid.
There is no dispute that the plaintiff supplied materi-
als to CSS for the project for which the plaintiff was
not paid. The plaintiff provided the defendant with
forty-five invoices with its proof of claim indicating that
CSS and the plaintiff had an ongoing agreement for the
materials to be supplied to CSS for the benefit of the
project. The defendant acknowledges that there was
such an agreement between the plaintiff and CSS but,
nevertheless, challenges the form in which the plaintiff
supplied proof of that agreement. The payment bond
failed to exclude any specific type of agreements or to
indicate that proof of certain types of agreements was
disallowed upon making a claim.
Because we agree with the court’s conclusions con-
cerning the interpretation of the payment bond, we
conclude that the court’s finding that the forty-five
invoices submitted to the defendant, which set forth
the relationship between CSS and the plaintiff, were
sufficient to comply with item 3 of § 16.1 of the payment
bond was supported by the evidence. Thus, there was
no error.
III
The defendant next claims that the court erred by
allowing the plaintiff to recover damages in excess of
the penal sum of the substitute bond.14 For the reasons
that follow, we decline to review the merits of this claim.
The following facts and procedural history are rele-
vant to this claim. As noted previously, the plaintiff had
recorded a mechanic’s lien against Morganti for the
balance owed on account of the materials it had sup-
plied to the project. Thereafter, the plaintiff, Morganti,
and the defendant executed the substitute bond agree-
ment whereby the plaintiff agreed to discharge the
mechanic’s lien and transfer the mechanic’s lien to a
substitute bond, which the defendant posted as surety.
Morganti and the defendant agreed to be bound to the
plaintiff for up to $533,411.23, which covered the
mechanic’s lien of $484,919.30 and included an addi-
tional $48,491.93, the amount included for costs and
interest pursuant to § 49-37. In May, 2018, the plaintiff
filed an offer of compromise with the court offering
to settle all of its claims against the defendant if the
defendant paid the plaintiff $460,000. The defendant
failed to respond to, or to take action on, the plaintiff’s
offer of compromise.
After finding that the $484,919.30 amount due to the
plaintiff had been wrongfully withheld by the defendant,
the court rendered judgment on both counts of the
complaint in favor of the plaintiff and awarded the
plaintiff a total of $628,403, with attorney’s fees to be
determined after a postjudgment hearing.15 The court’s
calculus included the $484,919 damages owed to the
plaintiff, $57,930 in prejudgment interest, and $85,554
in offer of compromise interest.
With respect to the prejudgment interest, the court,
in its discretion, awarded the plaintiff prejudgment
interest of 5 percent per annum pursuant to General
Statutes § 37-3a, which provides in relevant part that,
‘‘[e]xcept as provided in sections 37-3b, 37-3c and 52-
192a, interest at the rate of ten percent a year, and no
more, may be recovered and allowed in civil actions
. . . including actions to recover money loaned at a
greater rate, as damages for the detention of money
after it becomes payable. . . .’’ The court also awarded
the plaintiff offer of compromise interest pursuant to
General Statutes § 52-192a (c), which authorizes the
court to add interest of 8 percent per annum if ‘‘the
plaintiff made an offer of compromise which the defen-
dant failed to accept,’’ and the plaintiff recovers ‘‘an
amount equal to or greater than the sum certain speci-
fied in the plaintiff’s offer of compromise . . . .’’ The
court then indicated that a postjudgment hearing would
take place in order for the parties to address issues
concerning the calculation of attorney’s fees, offer of
compromise interest and prejudgment interest. The
court also allowed the parties to ‘‘file a timely procedur-
ally correct motion to reargue concerning the determi-
nation of interest in any form and the calculation
thereof.’’ Neither party submitted a motion to reargue
regarding the damages award nor did either party raise
any objections as to the court’s calculations.16
The defendant’s claim is waived because it raised no
objections at trial regarding the award or the court’s
calculus. ‘‘Generally, to preserve an issue for review, a
party must . . . object or otherwise assert such issue.
A party cannot preserve a claim through inaction but,
instead, must engage in affirmative conduct at an appro-
priate time.’’ MBNA America Bank, N.A. v. Bailey, 104
Conn. App. 457, 467, 934 A.2d 316 (2007). ‘‘[T]o review
[a] claim, which has been articulated for the first time
on appeal and not before the trial court, would result
in a trial by ambuscade of the trial judge.’’ (Internal
quotation marks omitted.) Ed Lally & Associates, Inc.
v. DSBNC, LLC, 145 Conn. App. 718, 729, 78 A.3d 148(2013)
Thus, because the defendant failed to raise any objec-
tions at trial concerning the court’s award of prejudg-
ment and offer of compromise interest as part of its
damages award, this claim is waived and an analysis
of its merits is not warranted.
IV
The defendant next claims that the court erred in
allowing the plaintiff to put on a rebuttal case after the
defendant rested its case without calling any witnesses
or introducing any evidence. We disagree.
We first set forth the standard of review for this claim.
‘‘It is well settled that the admission of rebuttal evidence
lies within the sound discretion of the trial court.’’
(Internal quotation marks omitted.) Boone v. Boeh-
ringer Ingelheim Pharmaceuticals, Inc., 335 Conn. 547,
573, 239 A.3d 1175 (2020). ‘‘Our standard of review of
the [defendant’s] claim is that of whether the court
abused its discretion in allowing this . . . testimony.
. . . Discretion means a legal discretion, to be exer-
cised in conformity with the spirit of the law and in a
manner to subserve and not to impede or defeat the
ends of substantial justice. . . . It goes without saying
that the term abuse of discretion . . . means that the
ruling appears to have been made on untenable
grounds. . . . In determining whether the trial court
has abused its discretion, we must make every reason-
able presumption in favor of the correctness of its
action.’’ (Citation omitted; internal quotation marks
omitted.) Cafro v. Brophy, 62 Conn. App. 113, 118–19,
774 A.2d 206, cert. denied, 256 Conn. 933, 776 A.2d 1149(2001). ‘‘This court will affirm a trial court’s admission
of rebuttal evidence which would have been normally
presented as part of the case-in-chief unless the party
claiming error sustains his burden of establishing harm-
ful error.’’ State v. Lisella, 187 Conn. 335, 337–38, 445
A.2d 922 (1982).
At trial, the defendant rested without calling any wit-
nesses regarding its special defenses; however, the
defendant did cross-examine Jonke, the only witness
presented at trial by the plaintiff. The defendant cross-
examined Jonke for several days and also admitted
various documents as exhibits concerning its special
defenses during the plaintiff’s case-in-chief. The court
did not allow the plaintiff to submit evidence to rebut
the defendant’s special defenses in its case-in-chief.
Instead, after the defendant rested and over the defen-
dant’s objection, the court allowed the plaintiff to call
Lawrence Rosati as a rebuttal witness based on the
defendant’s cross-examination. Rosati served as Mor-
ganti’s project executive on the construction project in
question. The court also allowed the plaintiff, over the
defendant’s objection, to introduce e-mail correspon-
dence between CSS and Morganti, as well as spread-
sheets created by CSS for billing requests submitted to
Morganti, in order for the plaintiff to establish that
Morganti continued to give CSS money even after Mor-
ganti was on notice that CSS had not been paying the
plaintiff. The spreadsheets purportedly showed that
there was a sum due to the plaintiff in early fall of 2016.
Before determining that the plaintiff was allowed to put
forth the rebuttal witness, the court heard the parties’
arguments as to whether the plaintiff was permitted to
proceed with its witness. The plaintiff posited that it
was calling the rebuttal witness ‘‘[b]ecause there was
evidence produced during cross-examination’’ by the
defendant addressing the defendant’s special defenses.
The plaintiff also argued that it should be allowed to
put on the rebuttal witness because the court barred
the plaintiff from putting on any evidence in its case-
in-chief to address the defendant’s special defenses.
The defendant countered by asserting that the law does
not allow a party to submit rebuttal testimony where
the opposing party has not presented any evidence in
its case-in-chief because there is no case to rebut, irre-
spective of whether evidence concerning the defen-
dant’s special defenses was proffered by the defendant
during the plaintiff’s case-in-chief.
The court noted that the defendant offered evidence
during its extensive cross-examination of the plaintiff’s
sole witness, and the defendant also ‘‘proffered some
documents in evidence.’’ The court also indicated that
the defendant did not have to put forth any evidence
in its direct case in order to sustain its burden of proof
on the special defenses because the defendant could
sustain its burden by the evidence the plaintiff put
before the court. While primarily resting its reasoning
on the findings in State v. Lisella, supra, 187 Conn.
335, the court asserted that the threshold question is
whether the plaintiff’s proffered evidence ‘‘could have
been introduced at an earlier stage in the proceedings.’’
The court allowed the plaintiff’s rebuttal evidence on
the basis of its discretion as provided under Practice
Book § 15-5 and also because it had denied the plaintiff
the opportunity to present evidence to rebut the defen-
dant’s special defenses during the plaintiff’s case-in-
chief.17 Before allowing the plaintiff to put forth the
evidence, the court iterated to the parties that the scope
of the plaintiff’s rebuttal evidence was limited only to
the defendant’s nine special defenses. The plaintiff was
not allowed to submit rebuttal evidence in support of
its case-in-chief.
‘‘[R]ebuttal evidence is that which refutes the evi-
dence [already] presented . . . rather than that which
merely bolsters one’s case.’’ (Internal quotation marks
omitted.) Boone v. Boehringer Ingelheim Pharmaceuti-
cals, Inc., supra, 335 Conn. 573. ‘‘[A] general contradic-
tion of the testimony given by the defendant is consid-
ered permissible rebuttal testimony.’’ (Internal
quotation marks omitted.) Id., 573–74. The court in
Boone also cited to 1 K. Broun, McCormick on Evidence
(7th Ed. 2013) § 4, p. 16, for the proposition that a
plaintiff is ‘‘confined to testimony refuting the defense
evidence,’’ unless the court, in its discretion, permits a
party to ‘‘depart from the regular scope of rebuttal.’’
(Internal quotation marks omitted.) Id., 574.
‘‘[T]he policy behind restrictions on the presentation
of rebuttal testimony is that a plaintiff is not entitled
to a second opportunity to present evidence that should
reasonably have been presented in [its] case-in-chief.’’
(Internal quotation marks omitted.) Cafro v. Brophy,
supra, 62 Conn. App. 120. In Cafro, we determined that
the trial court abused its discretion when it allowed the
plaintiffs to call a witness at the last minute after the
plaintiffs had rested their case-in-chief and the witness
testified about a highly contested issue. Id. The distinc-
tion in the present case, however, is that the plaintiff
was specifically barred by the trial court from introduc-
ing any evidence to rebut the defendant’s special
defenses during its case-in-chief, even after the defen-
dant submitted evidence concerning the special
defenses. The court indicated that it had barred the
plaintiff from presenting such evidence because it
believed it to be improper to allow the plaintiff to put
on a rebuttal case during its case-in-chief where, at the
time the plaintiff initially presented the evidence, the
issue of the special defenses had not yet been raised.
The defendant’s sole contention on appeal related to
this issue is that the plaintiff should not be allowed to
submit rebuttal evidence because the defendant did not
present any evidence or testimony during the defen-
dant’s case-in-chief. The record shows that the defen-
dant engaged in a lengthy cross-examination of the
plaintiff’s sole witness and admitted evidence during
the plaintiff’s case-in-chief, and, as the defendant con-
ceded at trial, cross-examination is indeed evidence.
The plaintiff’s rebuttal was not presented to bolster
its case-in-chief but, rather, to refute or contradict the
evidence the defendant put forth during the defendant’s
cross-examination of Jonke concerning the defendant’s
special defenses, and the documents that the defendant
admitted during that cross-examination. Thus, the argu-
ment advanced by the defendant is untenable.
As our Supreme Court has observed, the trial court
has the sound discretion as to the order of the proceed-
ings. See Boone v. Boehringer Ingelheim Pharmaceuti-
cals, Inc., supra, 335 Conn. 573; see also Practice Book
§ 15-5. We cannot conclude that the court abused its
discretion by allowing the plaintiff’s rebuttal evidence
after the defendant rested without putting forth any
evidence in its case-in-chief where, as here, the defen-
dant pleaded special defenses in its pleadings and,
partly, geared its cross-examination of the plaintiff’s
witness toward addressing those special defenses.
Additionally, the court barred the plaintiff from
addressing the defendant’s special defenses in its case-
in-chief. Accordingly, the court did not abuse its discre-
tion in allowing the plaintiff’s rebuttal evidence.
The judgment is affirmed.
In this opinion the other judges concurred.
1
See footnote 5 of this opinion.
2
The Wall Street Theater project was a construction project unrelated to
the project at issue.
3
General Statutes § 49-37 (a) provides in relevant part: ‘‘Whenever any
mechanic’s lien has been placed upon any real estate pursuant to sections
49-33, 49-34 and 49-35, the owner of that real estate, or any person interested
in it, may make an application to any judge of the Superior Court that the
lien be dissolved upon the substitution of a bond with surety, and the judge
shall order reasonable notice to be given to the lienor of the application.
. . . Whenever a bond has been substituted for any lien, pursuant to this
section, unless an action is brought to recover upon the bond within one
year from the date of recording the certificate of lien, the bond shall be void.’’
4
On appeal, the defendant does not contest the court’s findings as to its
sixth, seventh, and ninth special defenses. With respect to the defendant’s
sixth special defense, which alleged that the plaintiff’s claims under the
bonds were barred because the owner and Morganti had paid in full for the
materials supplied when they paid CSS, the court found for the plaintiff
because it was undisputed that the plaintiff had not received any payments
from the owner, Morganti, or CSS for the $484,919.30 owed to the plaintiff
for the materials it furnished and because General Statutes § 49-36 ‘‘only
permits such prepayment credit to property owners, not the general contrac-
tor.’’
With respect to the seventh special defense, which alleged that the plain-
tiff’s substitute bond claim was barred because neither the owner, Morganti,
nor the defendant owed the plaintiff for the materials supplied, the court
found for the plaintiff because the parties had stipulated to the fact that
the plaintiff indeed was owed $484,919.30 for materials it supplied that were
used for the project.
As to the ninth special defense, the court found that the plaintiff’s claims
were not barred because the oral agreement between CSS and the plaintiff
fell under the ‘‘specially manufactured exception’’ under § 42a-2-201 (3) and,
thus, was an enforceable agreement. Further, alternatively, the court found
that the delivery tickets and the credit agreement signed by CSS were
sufficient to satisfy the requirement for a signed writing.
5
Although the defendant also claims on appeal that the court erred when
it determined that its equitable special defenses did not apply to the surety
action at law brought by the plaintiff, we need not address that claim in
light of the fact that the court did, in fact, examine the merits of those
equitable special defenses and determined, in the alternative, that the defen-
dant had failed to meet its burden of proof as to those special defenses.
Moreover, in its appellate brief, the defendant contests only the court’s
findings as to whether the plaintiff breached the obligation of ‘‘diligence
and the utmost good faith’’ the defendant believed it was owed, and the
court’s findings as to whether the plaintiff’s conduct was ‘‘unreasonable’’
and ‘‘reckless.’’ Because the defendant has not challenged the court’s finding
that the plaintiff was not barred from recovering under the bonds pursuant
to the doctrine of unclean hands, we review only the court’s finding that
the defendant did not sustain its burden of establishing that the plaintiff
breached the obligation of ‘‘diligence and the utmost good faith.’’
6
As noted previously, the defendant also had asserted the same theory
in its pretrial brief.
7
Although the court referenced ‘‘unclean hands,’’ we only discuss the
court’s findings as to bad faith and common-law recklessness. See footnote
5 of this opinion.
8
General Statutes § 42-158l (a) provides: ‘‘Any provision in a construction
contract or any periodic lien waiver issued pursuant to a construction con-
tract that purports to waive or release the right of a contractor, subcontractor
or supplier engaged to perform services, perform labor or furnish materials
under the construction contract to (1) claim a mechanic’s lien, or (2) make
a claim against a payment bond, for services, labor or materials which have
not yet been performed and paid for shall be void and of no effect.’’
9
The defendant must establish that a contract existed between it and the
plaintiff, and that the plaintiff acted in bad faith in carrying out its obligations
under the contract in order to sustain a claim that the plaintiff acted in bad
faith amounting to a breach of the implied covenant of good faith and fair
dealing. As the court found, ‘‘[a]ll material suppliers had the right to make
a claim upon the payment bond simply by meeting the terms of § 16.1 [of
the payment bond]. No other conditions were set forth in the payment bond
for any material supplier to make a claim that they had not been paid for
materials furnished to them to this construction project. The payment bond
did not require any material supplier to perform credit checks on the subcon-
tractor who hired them. The payment bond makes no mention of [the plain-
tiff] by name. [The plaintiff] did not sign, guarantee or otherwise participate
in a modification or amendment of the payment bond. . . . When CSS
proposed in September, 2016, to charge [the plaintiff’s] materials to CSS’
account, [Morganti] did not object nor did it or the defendant offer certain
protective tools to verify that CSS would in fact pay [the plaintiff] in full
and timely.’’
10
The defendant does not contest the court’s interpretation of the payment
bond’s provisions on appeal.
11
Section 16.1 of the payment bond provides that a valid claim must
include a written statement by the claimant and include, at minimum, (1)
‘‘the name of the claimant’’; (2) ‘‘the name of the person for whom the labor
was done, or materials or equipment furnished’’; (3) ‘‘a copy of the agreement
or purchase order pursuant to which labor, materials or equipment was
furnished for use in the performance of the [c]onstruction [c]ontract’’; (4)
‘‘a brief description of the labor, materials or equipment furnished’’; (5) ‘‘the
date on which the [c]laimant last performed labor or last furnished materials
or equipment for use in the performance of the [c]onstruction [c]ontract’’; (6)
‘‘the total amount earned by the [c]laimant for labor, materials or equipment
furnished as of the date of the [c]laim’’; (7) ‘‘the total amount of previous
payments received by the [c]laimant’’; and (8) ‘‘the total amount due and
unpaid to the [c]laimant for labor, materials or equipment furnished as of
the date of the [c]laim.’’
12
On appeal, the defendant challenges only the court’s finding that the
documents furnished by the plaintiff satisfied item 3 of § 16.1 of the payment
bond. The defendant does not contest the court’s findings that the plaintiff
satisfied items 1, 2, 4, 5, 6, 7, and 8 of § 16.1 of the payment bond.
13
We note that the plaintiff was not a party to the payment bond agreement
or contract but merely a claimant as defined in § 16.2 of the payment bond,
which provides in relevant part that a claimant is an ‘‘individual or entity
having a direct contract with the [c]ontractor or with a subcontractor of
the [c]ontractor to furnish labor, materials or equipment for use in the
performance of the [c]onstruction [c]ontract. The term [c]laimant also
includes any individual or entity that has rightfully asserted a claim under
an applicable mechanic’s Iien . . . .’’
14
We note that the defendant is not contesting the court’s decision as to
the amount awarded under count two of the complaint, in which the plaintiff
sought relief under the payment bond that had a penal sum of approximately
$53 million.
15
We note that ‘‘a judgment on the merits is final for purposes of appeal
even though the recoverability or amount of attorney’s fees for the litigation
remains to be determined.’’ (Internal quotation marks omitted.) Doyle Group
v. Alaskans for Cuddy, 164 Conn. App. 209, 218, 137 A.3d 809, cert. denied,
321 Conn. 924, 138 A.3d 284 (2016). Moreover, ‘‘[w]hether the claim for
attorney’s fees is based on statute, a contract, or both, the pendency of a
ruling on an award for fees and costs does not prevent, as a general rule,
the merits judgment from becoming final for purposes of appeal.’’ (Internal
quotation marks omitted.) Id., 220.
16
We do not consider whether the defendant was required to file a motion
to reargue in order to preserve this claim. The defendant’s claim, however,
is waived because it failed to file or raise any objections at trial regarding
the court’s award.
17
Practice Book § 15-5 (a) provides in relevant part: ‘‘Unless the judicial
authority for cause permits otherwise, the parties shall proceed with the
trial and argument in the following order:
‘‘(1) The plaintiff shall present a case-in-chief.
‘‘(2) The defendant may present a case-in-chief.
‘‘(3) The plaintiff and the defendant may present rebuttal evidence in
successive rebuttals, as required. The judicial authority for cause may permit
a party to present evidence not of a rebuttal nature, and if the plaintiff is
permitted to present further evidence in chief, the defendant may respond
with further evidence in chief. . . .’’