Electrical Contractors, Inc. v. 50 Morgan Hospitality Group, LLC

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ELECTRICAL CONTRACTORS, INC. v. 50 MORGAN
HOSPITALITY GROUP, LLC, ET AL.
(AC 44475)
Alvord, Cradle and Lavine, Js.
Syllabus
The plaintiff subcontractor sought to recover damages from, among others,
the defendant general contractor, G Co., for, inter alia, breach of contract
and breach of the implied covenant of good faith and fair dealing.
The plaintiff entered into a contract with G Co. in connection with a
construction project for the renovation of a property owned by the
named defendant, M Co. In its operative complaint, the plaintiff alleged,
inter alia, that G Co. had failed to pay for materials and services that
the plaintiff had provided. In its special defenses, G Co. asserted that
language in the parties’ contract made clear that the G Co.’s obligation
to pay the plaintiff was dependent upon G Co. first receiving payment
from M Co. Specifically, the contract stated that the plaintiff expressly
agreed that payment by M Co. to G Co. was a ‘‘condition precedent’’ to
G Co.’s obligation to make partial or final payments to the plaintiff. G
Co. filed a motion for summary judgment on the counts against it based
on that contractual language, arguing that it had no duty to pay the
plaintiff because it had not yet received payment from M Co. The trial
court granted G Co.’s motion and rendered summary judgment in favor
of G Co., and the plaintiff appealed to this court.
1. The trial court properly granted G Co.’s motion for summary judgment
as to the plaintiff’s breach of contract claim: the clear and unambiguous
language of the parties’ contract provided that G Co. was not obligated
to pay the plaintiff until it received payment from M Co.; moreover, this
court declined the plaintiff’s invitation to find ambiguity in the payment
provision and to interpret it to mean that G Co.’s obligation to pay
the plaintiff merely was postponed for a reasonable period of time;
furthermore, the plaintiff did not cite any binding appellate authority
to support its assertion that clauses such as the one at issue in the
present case are disfavored in Connecticut and, more particularly, in
the construction industry.
2. The trial court properly granted G Co.’s motion for summary judgment
as to the plaintiff’s claim for breach of the implied covenant of good
faith and fair dealing: the plaintiff failed to allege or to provide any
evidence to create a genuine issue of material fact that G Co. acted in
bad faith in attempting to collect payment from M Co. or in failing to
pay the plaintiff; moreover, this court’s independent review of the record
that was before the trial court when it rendered its summary judgment
did not reveal a potential sinister motive or dishonest purpose on the
part of G Co.
Argued January 3—officially released April 12, 2022
Procedural History
Action to recover damages for, inter alia, breach of
contract, and for other relief, brought to the Superior
Court in the judicial district of Hartford, where the
court, Moukawsher, J., rendered summary judgment in
favor of the defendant Greython Construction, LLC, and
the plaintiff appealed to this court. Affirmed.
Paul R. Fitzgerald, for the appellant (plaintiff).
Edward R. Scofield, with whom, on the brief, were
Heather Spaide and Joseph J. Cessario, for the appellee
(defendant Greython Construction, LLC).
Opinion
LAVINE, J. The plaintiff, Electrical Contractors, Inc.,
appeals from the summary judgment rendered by the
trial court in favor of the defendant Greython Construc-
tion, LLC (Greython), regarding claims arising out of a
contract between the plaintiff and Greython pursuant
to which the plaintiff, as Greython’s subcontractor, was
to complete work on a property owned by the defendant
50 Morgan Hospitality Group, LLC (50 Morgan).1 On
appeal, the plaintiff claims that the court erred in grant-
ing Greython’s motion for summary judgment (1) based
on language in the contract providing that payment by
50 Morgan to Greython was a ‘‘condition precedent’’ to
Greython’s obligation to make payments to the plaintiff,
and (2) because Greython failed to present any evidence
demonstrating the absence of a genuine issue of mate-
rial fact either that it was not the cause of 50 Morgan’s
failure to make payment or that it had made a substan-
tive effort to collect payment. We disagree with the
plaintiff and, accordingly, affirm the judgment of the
court.
The record reveals the following relevant undisputed
facts and procedural history. Greython served as the
general contractor for a project involving the renovation
of a property owned by 50 Morgan. The plaintiff served
as a subcontractor for Greython. On or about February
3, 2017, Greython entered into a contract with the plain-
tiff in which the plaintiff agreed to ‘‘furnish all labor,
material, and equipment to perform all [electrical]
work’’ for the project. The plaintiff provided Greython
with requisitions seeking payment for materials fur-
nished and services provided in connection with the
project.
At the heart of this appeal is the meaning of the
following language of the contract between the plaintiff
and Greython. Article 2 of the contract provides that
Greython will pay the plaintiff fixed sums of money
in accordance with article 6 of the contract. Article 6
provides in relevant part: ‘‘[The plaintiff] shall submit
to [Greython] a requisition, on forms provided by [Grey-
thon] . . . . Partial payments shall be due following
receipt of payment [from] [50 Morgan] to [Greython]
in the amount of 95 [percent] of the material in place
for which payment has been made to [Greython] by [50
Morgan]. [The plaintiff] expressly agrees that payment
by [50 Morgan] to [Greython] is a condition precedent
to [Greython’s] obligation to make partial or final pay-
ments to [the plaintiff] as provided in this paragraph.
. . .’’ (Emphasis added.)
On January 31, 2018, the plaintiff commenced this
action seeking payment for the costs of the materials
it had furnished and the services it had provided in
connection with the renovation project. On July 6, 2018,
the plaintiff filed the amended complaint, which is the
operative complaint. In the complaint, the plaintiff
alleged that it performed its obligations under the sub-
contract by providing labor, materials, and equipment
for the project. Greython, however, failed to pay the
plaintiff for all amounts due for the work it had com-
pleted on the project. The plaintiff asserted that ‘‘the
sum of $350,616.65, plus attorney’s fees, accrued inter-
est, and costs remains due and owing to [the plaintiff].’’
The plaintiff alleged the following relevant counts
against Greython:2 breach of contract for failing to pay
the plaintiff the contract balance of $350,616.65 (count
two); breach of the implied covenant of good faith and
fair dealing for ‘‘failing to make payment of the sums
due to [the plaintiff] that are not subject to a good faith
dispute’’ and for ‘‘failing to provide notice or response to
[the plaintiff] in good faith as to the specific, justifiable
reasons for Greython’s failure to make payment to [the
plaintiff]’’ (count three); unjust enrichment (count
four); and a violation of General Statutes § 42-158j for
failure to pay the plaintiff any undisputed amount and
refusing to place any disputed funds in escrow when
it was put on notice of the plaintiff’s claim (count six).3
On March 4, 2019, Greython filed an amended answer
and special defenses to the operative complaint, in
which it asserted two special defenses, both of which
contended that the relevant language in article 6 made
clear that Greython’s obligation to pay the plaintiff was
dependent upon Greython first receiving payment from
50 Morgan. On the same date, Greython filed a motion
for summary judgment as to the second, third, fourth,
and sixth counts of the operative complaint. Greython
filed a memorandum of law in support of its motion,
in which it argued that the language in article 6 of the
contract was clear and unambiguous that it was not
obligated to pay the plaintiff until it received payment
from 50 Morgan. Because it had not yet received pay-
ment from 50 Morgan, Greython argued, ‘‘[it] ha[d] no
duty to pay [the plaintiff] . . . .’’ On April 5, 2019, the
plaintiff filed an objection to Greython’s motion and an
accompanying memorandum of law. The gist of the
plaintiff’s argument was that the payment provision in
article 6 was ambiguous as to which party bore the risk
of 50 Morgan’s nonpayment. Thus, the plaintiff argued,
this provision should be interpreted to mean that non-
payment by 50 Morgan ‘‘merely postpone[s] for a rea-
sonable period of time’’ Greython’s obligation to pay
the plaintiff. On April 18, 2019, Greython filed a reply
to the plaintiff’s objection.
On April 24, 2019, the court heard oral argument on
Greython’s motion for summary judgment. On April
30, 2019, the court issued a memorandum of decision
granting Greython’s motion for summary judgment in
its entirety as it pertained to the plaintiff. The court
concluded that, pursuant to article 6 of the contract,
Greython was not obligated to pay the plaintiff until 50
Morgan paid Greython. The court stated: ‘‘[The plaintiff]
say[s] the court should read the language at issue [in
article 6 of the contract] to mean that [Greython] will
pay [the plaintiff] within a reasonable period of time
even if the owner never pays [Greython].’’ The court
noted that ‘‘courts have deviated from this view and
read into some contracts the reasonable time language
based upon the implications of labelling a provision
. . . ‘pay-when-paid’ . . . or . . . [‘pay-if-paid’].4 But
none of [their decisions] bind [the trial] court to do
likewise.’’ (Footnote added.) On the contrary, the court
stated, ‘‘[t]he courts that do bind [the trial] court suggest
that [a reviewing court] will see an obvious condition
precedent and the risk bearing arrangement it reflects
and enforce it.’’
The court further stated: ‘‘The obvious import of the
contract language in this case is that if [Greython] never
gets paid then neither do its subcontractors. Because
[50 Morgan’s] payment is labelled a condition prece-
dent—a thing that must happen first—the contract
needed no additional words to make this consequence
clear to a reader of ordinary intelligence.’’ (Emphasis
in original.) The court concluded: ‘‘So [the plaintiff can-
not]—under the present circumstances—win under the
plain language of the contract.’’
Regarding the count alleging breach of the covenant
of good faith and fair dealing, the court stated: ‘‘[T]he
[plaintiff] certainly express[es] dissatisfaction with
Greython’s efforts [to collect payment from 50 Morgan]
but [does not] offer any evidence sufficient to create
an issue of fact over whether Greython acted in bad
faith. Instead, [although] questions have been raised
about Greython’s efforts, the [plaintiff has] cited no
evidence that could possibly support a claim that Grey-
thon has acted from some interested or sinister motive.’’
On May 15, 2019, the plaintiff, pursuant to Practice
Book §§ 11-11 and 11-12, filed a ‘‘motion for reargument/
reconsideration and articulation’’ of the court’s decision
on Greython’s motion for summary judgment. On May
20, 2019, the court denied that motion. This appeal
followed.5 Additional facts and procedural history will
be set forth as necessary.
We begin by setting forth the relevant standard of
review, which applies to both of the plaintiff’s claims.
‘‘This court’s standard of review for a motion for sum-
mary judgment is well established. Practice Book § [17-
49] 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. . . . In deciding a motion
for summary judgment, the trial court must view the
evidence in the light most favorable to the nonmoving
party. . . . The party seeking summary judgment has
the burden of showing the absence of any genuine issue
[of] material facts which, under applicable principles
of substantive law, entitle him to a judgment as a matter
of law . . . and the party opposing such a motion must
provide an evidentiary foundation to demonstrate the
existence of a genuine issue of material fact. . . .
[I]ssue-finding, rather than issue-determination, is the
key to the procedure. . . . [T]he trial court does not
sit as the trier of fact when ruling on a motion for
summary judgment. . . . [Its] function is not to decide
issues of material fact, but rather to determine whether
any such issues exist. . . . Our review of the decision
to grant a motion for summary judgment is plenary.
. . . We therefore must decide whether the court’s con-
clusions were legally and logically correct and find sup-
port in the record.’’ (Internal quotation marks omitted.)
Buehler v. Newtown, 206 Conn. App. 472, 480–81, 262
A.3d 170 (2021).
I
The plaintiff first claims that the court erred in grant-
ing Greython’s motion for summary judgment based on
language in the contract providing that payment by
50 Morgan was a ‘‘condition precedent’’ to Greython’s
obligation to make payments to the plaintiff. The plain-
tiff contends that ‘‘the overwhelming weight of author-
ity in Connecticut holds that similar provisions in con-
struction contracts do not excuse a general contractor’s
payment obligations to its subcontractors.’’ We dis-
agree.
The following legal principles govern our interpreta-
tion of contracts. ‘‘A contract must be construed to
effectuate the intent of the parties, which is determined
from the language used interpreted in the light of the
situation of the parties and the circumstances con-
nected with the transaction. . . .
‘‘[T]he intent of the parties is to be ascertained by a
fair and reasonable construction of the written words
and . . . the language used must be accorded its com-
mon, natural, and ordinary meaning and usage where
it can be sensibly applied to the subject matter of the
[writing]. . . . Where the language of the [writing] is
clear and unambiguous, the [writing] is to be given
effect according to its terms. A court will not torture
words to import ambiguity where the ordinary meaning
leaves no room for ambiguity . . . . Similarly, any
ambiguity in a [written instrument] must emanate from
the language used in the [writing] rather than from one
party’s subjective perception of the terms. . . . If a
contract is unambiguous within its four corners, the
determination of what the parties intended by their
contractual commitments is a question of law.’’ (Cita-
tions omitted; internal quotation marks omitted.) Mur-
tha v. Hartford, 303 Conn. 1, 7–8, 35 A.3d 177 (2011).
The plaintiff argues that the court incorrectly inter-
preted the payment provision in article 6 to mean that
if Greython never receives payment from 50 Morgan,
it is not obligated to pay its subcontractors. Specifically,
the plaintiff argues that the court incorrectly interpreted
the payment provision in article 6 as a ‘‘pay-if-paid’’
clause. The plaintiff states: ‘‘ ‘Pay-if-paid’ provisions in
construction contracts seek to transfer the risk of
owner default between the general contractor and sub-
contractor by contractually making the owner’s pay-
ment to the general contractor a condition precedent to
the general contractor’s payment to the subcontractor.’’
Thus, unlike a ‘‘pay-when-paid’’ clause, if a general con-
tractor never receives payment from an owner, it is not
obligated to pay its subcontractors at all. The plaintiff
asserts that the court instead should have interpreted
the payment provision in article 6 as a ‘‘pay-when-paid’’
clause. A ‘‘pay-when-paid’’ clause merely postpones a
general contractor’s obligation to pay its subcontractors
for a reasonable period of time, as opposed to creating
a condition precedent to payment. See DeCarlo & Doll,
Inc. v. Dilozir, 45 Conn. App. 633, 641 n.4, 698 A.2d
318 (1997) (DeCarlo). Thus, it claims, when a contract
contains a ‘‘pay-when-paid’’ clause, a general contractor
remains obligated to pay its subcontractors even if it
never receives payment from the owner.
The plaintiff argues that clauses like the one in article
6 are ‘‘disfavored’’ in Connecticut and that ‘‘[t]he trial
court’s decision . . . represents the minority position
not only in Connecticut, but also nationally.’’ The plain-
tiff reasons that because such clauses ‘‘are disfavored
by courts, they will be enforced only where the contract
language clearly reflects the subcontractor’s agreement
to assume the risk of the owner’s nonpayment.’’ The
plaintiff contends, without citing any binding authority,
that ‘‘Connecticut courts have universally stated that
in order to effectively transfer the risk of owner nonpay-
ment from the general contractor to a subcontractor,
a contingent payment provision must be clear and
unequivocal,’’ and, ‘‘[a]t [a] minimum, the provision
must clearly state which party bears the risk of the
project owner failing to pay or becoming insolvent.’’6
The plaintiff argues that article 6 ‘‘is not sufficiently
clear and unequivocal to transfer the risk of [50 Mor-
gan’s] default from [Greython] to the plaintiff.’’ In
essence, the plaintiff argues that article 6 is ambiguous
as to which party assumed the risk of 50 Morgan becom-
ing insolvent. Thus, the plaintiff asks this court to inter-
pret the payment provision in article 6 to mean that
Greython’s obligation to pay it merely was temporarily
postponed for a reasonable period of time and insists
that Connecticut law favors such a result.
The plaintiff, however, is unable to cite any binding
appellate authority, and we are aware of none, that
supports its assertion that clauses like the one in article
6 are disfavored in Connecticut generally, and particu-
larly, as it argues, in the construction industry.7 In sup-
port of its argument that we should interpret the rele-
vant language in article 6 as a ‘‘pay-when-paid’’ clause,
the plaintiff relies primarily on DeCarlo & Doll, Inc. v.
Dilozir, supra, 45 Conn. App. 633, which is distinguish-
able from the present case.8 As this court noted in Sun-
tech of Connecticut, Inc. v. Lawrence Brunoli, Inc.,
143 Conn. App. 581, 591 n.4, 72 A.3d 1113, cert. denied,
310 Conn. 910, 76 A.3d 626 (2013), DeCarlo ‘‘simply did
not involve a ‘pay-when-paid’ provision. Although the
court made a comparison to ‘pay-when-paid’ provisions,
that comparison was dicta . . . .’’ (Citation omitted.)
Furthermore, unlike in the present case, the clause at
issue in DeCarlo did not include the phrase ‘‘condition
precedent,’’ and this court expressly concluded in
DeCarlo that the relevant provision ‘‘[was] not a condi-
tion precedent . . . .’’ DeCarlo & Doll, Inc. v. Dilozir,
supra, 643.9
Greython counters that the payment provision in arti-
cle 6 is clear and unambiguous that its obligation to
pay the plaintiff is expressly conditioned on it receiving
payment from 50 Morgan. Greython notes that article
6 ‘‘contains no language or provisions [that] are focused
on establish[ing] the time frame in which [the plaintiff]
must or shall be paid by Greython.’’ We agree.
We decline the plaintiff’s invitation to find ambiguity
in the payment provision in article 6 when we see none.
Rather, we rely on the plain language of the contract,
which has just one possible reasonable interpretation.
To reiterate, the relevant payment provision in article
6 of the contract states: ‘‘[The plaintiff] expressly agrees
that payment by [50 Morgan] to [Greython] is a condi-
tion precedent to [Greython’s] obligation to make par-
tial or final payments to [the plaintiff] . . . .’’ (Empha-
sis added.) It is well settled that ‘‘[a] condition precedent
is a fact or event which the parties intend must exist
or take place before there is a right to performance.
. . . A condition is distinguished from a promise in that
it creates no right or duty in and of itself but is merely
a limiting or modifying factor. . . . If the condition is
not fulfilled, the right to enforce the contract does not
come into existence. . . . Whether a provision in a con-
tract is a condition the [nonfulfillment] of which
excuses performance depends [on] the intent of the
parties, to be ascertained from a fair and reasonable
construction of the language used in the light of all
the surrounding circumstances when they executed the
contract.’’ (Internal quotation marks omitted.) Wells
Fargo Bank, N.A. v. Lorson, 341 Conn. 430, 440, 267
A.3d 1 (2021).
The plaintiff has not cited any appellate case holding
that the term ‘‘condition precedent’’ has a special,
understood meaning in the construction industry, nor
has the plaintiff pointed to any industry custom in which
these types of contractual provisions are acknowledged
to require a general contractor to pay its subcontractors
within a reasonable time even if the general contractor
never receives payment from the owner. We decline to
read into the contract a ‘‘reasonable time’’ provision.
Instead, we are duty bound to rely on the plain language
of the contract, which makes clear that 50 Morgan must
pay Greython in order to trigger Greython’s duty to pay
the plaintiff.
‘‘There is a strong public policy in Connecticut
favoring freedom of contract . . . . This freedom
includes the right to contract for the assumption of
known or unknown hazards and risks that may arise
as a consequence of the execution of the contract.
Accordingly, in private disputes, a court must enforce
the contract as drafted by the parties and may not
relieve a contracting party from anticipated or actual
difficulties undertaken pursuant to the contract, unless
the contract is voidable on grounds such as mistake,
fraud or unconscionability. . . . If a contract violates
public policy, this would be a ground to not enforce
the contract. . . . A contract . . . however, does not
violate public policy just because the contract was
made unwisely. . . . [C]ourts do not unmake bar-
gains unwisely made. Absent other infirmities, bar-
gains moved on calculated considerations, and whether
provident or improvident, are entitled nevertheless to
sanctions of the law. . . . Although parties might pre-
fer to have the court decide the plain effect of their
contract contrary to the agreement, it is not within
its power to make a new and different agreement;
contracts voluntarily and fairly made should be held
valid and enforced in the courts.’’ (Emphasis added;
internal quotation marks omitted.) Geysen v. Securitas
Security Services USA, Inc., 322 Conn. 385, 392–93, 142
A.3d 227 (2016).
In any construction project, there is a risk that an
owner will become insolvent and therefore be unable
to pay its general contractor. The plaintiff in the present
case is a sophisticated construction company.10 It could
have added language to the contract specifying that
Greython’s duty to pay would be postponed only tempo-
rarily if Greython did not receive payment from 50
Morgan. Instead, the plaintiff now asks this court to
write such clarifying language into the contract. We are
not inclined to make a new and different agreement by
adding terms to which the plaintiff and Greython did
not agree. Furthermore, as the court noted in its memo-
randum of decision, our conclusion ‘‘[does not] change
the [plaintiff’s] right to be paid any time Greython gets
paid in the future. It just means that not having been
paid by [50 Morgan], Greython’s failure to pay the [plain-
tiff] now [does not] breach the express contract lan-
guage.’’
We are not being asked whether the contractual lan-
guage, in hindsight, appears to us to be fair or reason-
able. We are simply being asked to determine if the
language means what it says. We conclude that the
plain language of article 6 of the contract is clear and
unambiguous that Greython is not obligated to pay the
plaintiff until it receives payment from 50 Morgan.
Accordingly, we also conclude that the court properly
granted Greython’s motion for summary judgment as
to the plaintiff’s breach of contract claim.11
II
The plaintiff next claims that the court erred in grant-
ing Greython’s motion for summary judgment because
Greython failed to present any evidence demonstrating
the absence of a genuine issue of material fact either
that it was not the cause of 50 Morgan’s failure to make
payment or that it had made a substantive effort to
collect payment. We will address this argument as it
relates to the plaintiff’s breach of the implied covenant
of good faith and fair dealing claim against Greython.12
We conclude that the court did not err in granting Grey-
thon’s motion for summary judgment as to this claim.13
‘‘[I]t is axiomatic that the . . . duty of good faith and
fair dealing is a covenant implied into a contract or a
contractual relationship. . . . 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 cove-
nant 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 cove-
nant of good faith and fair dealing], the acts by which
a defendant 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.’’ (Internal quotation marks omitted.) Renaissance
Management Co. v. Connecticut Housing Finance
Authority, 281 Conn. 227, 240, 915 A.2d 290 (2007).
‘‘Bad faith in general implies . . . actual or construc-
tive 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 mis-
take as to one’s rights or duties, but by some interested
or sinister motive. . . . Bad faith means more than
mere negligence; it involves a dishonest purpose.’’
(Internal quotation marks omitted.) Geysen v. Securitas
Security Services USA, Inc., supra, 322 Conn. 399–400.
‘‘The standard of proof applicable to claims of bad faith
is clear and convincing evidence.’’ M.J. Daly & Sons,
Inc. v. West Haven, 66 Conn. App. 41, 53, 783 A.2d 1138,
cert. denied, 258 Conn. 944, 786 A.2d 430 (2001).
The following additional procedural history is rele-
vant to this claim. In the operative complaint, the plain-
tiff stated that the contract ‘‘contains an implied cove-
nant of good faith and fair dealing requiring that neither
party do anything that will injure the right of the other
to receive the benefits of the agreement.’’ The plaintiff
alleged that Greython breached its duty of good faith
and fair dealing by (1) ‘‘failing to make payment of the
sums due to [the plaintiff] that are not subject to a
good faith dispute,’’ and (2) ‘‘failing to provide notice
or response to [the plaintiff] in good faith as to the
specific, justifiable reasons for Greython’s failure to
make payment to [the plaintiff].’’ The plaintiff further
alleged: ‘‘These acts and omissions by Greython were
undertaken in bad faith, solely for the purpose of
avoiding Greython’s express and implied obligations
under the parties’ contract.’’ We reasonably interpret
the plaintiff’s claim before this court as arguing that
Greython breached the implied covenant of good faith
and fair dealing by not making a ‘‘substantive effort’’
to collect payment from 50 Morgan, thereby injuring
the plaintiff’s right to receive the benefits of its agree-
ment with Greython.14
Viewing the record in the light most favorable to the
plaintiff as the nonmoving party, there is no evidence,
let alone evidence sufficient to create a genuine issue
of material fact, that Greython acted in bad faith when
attempting to collect payment from 50 Morgan. Our
independent review of the evidence that was before the
court when it rendered its summary judgment does not
reveal a potential sinister motive or dishonest purpose
on the part of Greython.15
The plaintiff did not allege or provide evidence that
Greython acted with a dishonest purpose in unsuccess-
fully attempting to collect payment from 50 Morgan.
Accordingly, we conclude that the court properly
decided that there was no genuine issue of material
fact that Greython did not act in bad faith when it did
not pay the plaintiff.
The judgment is affirmed.
In this opinion the other judges concurred.
1
The amended complaint, which serves as the operative complaint, lists
sixteen defendants, including Greython and 50 Morgan. Greython is the only
defendant participating in the present appeal. For purposes of clarity, we
will refer in this opinion to Greython and 50 Morgan by name.
2
The first count of the operative complaint was brought against all of the
defendants, including Greython, to foreclose on a mechanic’s lien that the
plaintiff filed on the land records for the city of Hartford. On October 24,
2019, the plaintiff withdrew that count.
3
Counts five, seven, and eight of the operative complaint were directed
against 50 Morgan, which is not a party to this appeal.
4
See, e.g., DeCarlo & Doll, Inc. v. Dilozir, 45 Conn. App. 633, 641 n.4,
698 A.2d 318 (1997) (comparing contract provision to ‘‘pay-when-paid’’
clause, which had been held by Massachusetts Supreme Judicial Court to
merely postpone general contractor’s obligation to pay subcontractors for
reasonable time); Titan Mechanical Contractors, Inc. v. Klewin Building
Co., Superior Court, judicial district of Hartford, Docket No. CV-XX-XXXXXXX
(October 30, 2007) (44 Conn. L. Rptr. 429, 429–30) (contract stated that
payment from owner to general contractor was ‘‘express condition precedent
to any payment by [g]eneral [c]ontractor to [s]ubcontractor,’’ but court
interpreted provision as ‘‘pay-when-paid’’ clause and stated that ‘‘under this
interpretation payment would be required within a reasonable time even if
[the general contractor was] not paid’’); R & L Acoustics v. Liberty Mutual
Ins. Co., Superior Court, judicial district of Fairfield, Docket No. CV-00-
uously conditioned subcontractor’s right to payment on general contractor’s
receipt of funds from owner, court held that general contractor’s duty to
pay subcontractor was only temporarily postponed for reasonable time).
5
The court rendered summary judgment in favor of Greython as to counts
two, three, four, and six. The plaintiff’s appeal form states that it is appealing
from the ‘‘granting of [Greython’s] motion for summary judgment.’’ In its
brief to this court, the plaintiff only challenges the court’s conclusions as
to count two (breach of contract) and count three (breach of the implied
covenant of good faith and fair dealing).
6
At oral argument before this court, counsel for the plaintiff acknowledged
that he is not aware of any appellate authority to support the plaintiff’s
contention that including the phrase ‘‘condition precedent’’ in a contract
without clarifying language is not sufficient to clearly and unambiguously
transfer the risk of owner nonpayment from a general contractor to its
subcontractor.
7
In advancing this argument, the plaintiff relies on Thos. J. Dyer Co. v.
Bishop International Engineering Co., 303 F.2d 655 (6th Cir. 1962), and
R & L Acoustics v. Liberty Mutual Ins. Co., Superior Court, judicial district
of Fairfield, Docket No. CV-XX-XXXXXXX-S (September 27, 2001), neither of
which is binding on this court.
8
In DeCarlo & Doll, Inc. v. Dilozir, supra, 45 Conn. App. 639, the contract
provided that payment from the defendant to the plaintiff was due thirty
days after the defendant was billed on the first invoice. The parties then
amended the contract by adding a clause that stated: ‘‘ ‘Subject to payment
with all outstanding payments to be paid in full at time of financing of
project’ . . . .’’ Id., 637. The defendant did not receive financing and did
not pay the entire bill for the services rendered by the plaintiff. Id. The
plaintiff brought a breach of contract action against the defendant and ‘‘the
trial court permitted the defendant to prevail on a special defense that
alleged that the defendant’s payment obligations under the contract were
conditioned on the defendant’s securing financing from a third party, which
never occurred.’’ Id., 634. On appeal, this court stated that the clause ‘‘was
not a condition on which payment was contingent.’’ Id., 641. This court held:
‘‘Viewing the contract as a whole, we conclude that the clause ‘subject to
payment with all outstanding payments to be paid in full at time of financing’
is not a condition precedent but a date of payment set by the defendant.’’
Id., 643. In reaching its conclusion, this court compared the clause to a ‘‘pay
when paid’’ clause used by contractors in the construction industry. Id.,
641 n.4.
Several Superior Court cases have cited DeCarlo when interpreting con-
tract clauses that, like the clause in the present case, expressly and unambig-
uously condition an obligee’s right to payment on an obligor’s receipt of
payment from a third party. Some of those cases refer to these types of
clauses as ‘‘pay-if-paid’’ clauses. Our trial courts have reached different
conclusions as to the interpretation of this type of clause. See, e.g., R & L
Acoustics v. Liberty Mutual Ins. Co., Superior Court, judicial district of
Fairfield, Docket No. CV-XX-XXXXXXX-S (September 27, 2001) (clause not
enforceable as condition precedent even though it stated ‘‘[t]he Contractor
shall have no liability or responsibility for any amount due or claimed to
be due to Subcontractor except to the extent Contractor actually receives
funds from Owner specifically designated for disbursement to the Subcon-
tractor as receipt of such funds from the Owner are specifically made a
condition precedent to the Contractor’s obligation to make payments to
Subcontractor hereunder’’ (emphasis added; internal quotation marks omit-
ted)); Lindade Construction, Inc. v. Continental Casualty Co., Superior
Court, judicial district of Waterbury, Docket No. CV-05-008767-S (February
25, 2009) (47 Conn. L. Rptr. 323) (‘‘pay-if-paid’’ clause was enforceable and
not void as against public policy given strong public policy in Connecticut
favoring freedom of contract). In the present case, the plaintiff does not
cite any Connecticut appellate cases, and we are aware of none, that address
the enforceability of ‘‘pay-if-paid’’ clauses.
9
At oral argument before this court, counsel for the plaintiff stated that
he was ‘‘100 percent certain’’ that Greython drafted the contract and asserted
that it is typical for a general contractor to use its own standard form
contract with its subcontractors. Because we conclude that the contractual
language is plain and unambiguous, we need not consider the maxim of
contract construction that states that, where an ambiguity exists, contractual
language is to be construed against the drafter. See, e.g., Cantonbury Heights
Condominium Assn., Inc. v. Local Land Development, LLC, 273 Conn. 724,
735, 873 A.2d 898 (2005).
10
At oral argument before this court, counsel for the plaintiff agreed with
this court’s characterization of the plaintiff as a ‘‘sophisticated’’ construc-
tion company.
11
Our conclusion as to this claim addresses the court’s determination as
to count two of the operative complaint. In part II of this opinion, we will
address the court’s determination as to count three. The plaintiff does not
challenge the court’s determinations as to counts four and six. See footnote
5 of this opinion.
12
In this claim, the plaintiff challenges the court’s conclusions as to the
granting of Greython’s motion for summary judgment regarding both the
breach of contract and the breach of the implied covenant of good faith
and fair dealing claims. Previously in this opinion, we have concluded that
Greython is not required to pay the plaintiff until it receives payment from
50 Morgan. The plaintiff does not cite any binding appellate authority that
supports its assertion that, in order for Greython to prevail on its motion
for summary judgment, Greython was required to demonstrate that it either
was not the cause of 50 Morgan’s failure to make payment or that it made
a substantive effort to collect payment. For the reasons set forth in this
section of the opinion, the plaintiff’s argument on this issue is more properly
encompassed by its claim that Greython breached the implied covenant of
good faith and fair dealing.
13
As part of this claim, the plaintiff argues that there was no factual
support for the court’s conclusion that Greython provided evidence that it
acted in good faith. In its memorandum of decision, the court stated: ‘‘In
support of its motion, Greython asserts that it has a great deal of its own
money at stake and [it] has tried diligently to collect the sums owed to it
and its subcontractors.’’ After concluding that the plaintiff did not offer
evidence sufficient to create an issue of fact as to whether Greython acted in
bad faith, the court stated: ‘‘The [plaintiff cannot] survive summary judgment
when [it has] produced no evidence of bad faith in response to [Greython’s]
evidence of good faith.’’ The plaintiff takes issue with the court’s conclusion
that Greython provided evidence of good faith regarding its efforts to collect
from 50 Morgan. It argues that Greython ‘‘failed to present any evidence
that it made any effort—beyond merely forwarding the plaintiff’s payment
applications to [50 Morgan]—to obtain payment from [50 Morgan] for the
plaintiff’s work.’’
Our independent review of the record before the court at the time it
granted the motion for summary judgment indicates that the only evidence
that Greython presented about its good faith efforts to collect payment from
50 Morgan came from a portion of the affidavit of Kyle Klewin, Greython’s
president, which states that Greython submitted requisitions seeking pay-
ments for the materials and services provided both by Greython and its
subcontractors. At the hearing on Greython’s motion for summary judgment,
counsel for Greython detailed its efforts to collect payment from 50 Morgan.
In its memorandum of decision, the court appeared to rely in part on those
statements by counsel, which are not evidence. Accordingly, the court appar-
ently overstated the scant evidence in the record about Greython’s efforts
to collect payment from 50 Morgan. As we discuss in more detail later in
this opinion, however, the plaintiff did not submit evidence of bad faith on
the part of Greython. Thus, there was a lack of evidence sufficient to create
a genuine issue of material fact as to Greython’s bad faith. In the absence
of such evidence, this mischaracterization in the court’s memorandum of
decision does not affect the outcome of this case.
14
For example, at oral argument before this court, when discussing the
lack of evidence of bad faith submitted by the plaintiff, counsel for the
plaintiff argued that Greython’s ‘‘failure to take any action’’ against 50 Morgan
was ‘‘telling.’’ In other words, the plaintiff seemed to argue that Greython’s
failure to more aggressively pursue payment from 50 Morgan is evidence
of bad faith.
15
Greython attached to its memorandum in support of its motion for
summary judgment the affidavit of its president, Kyle Klewin. This affidavit
states that Greython submitted requisitions seeking payment for the materi-
als and services provided both by it and its subcontractors. The plaintiff
argues that Greython failed to present evidence that it made any effort to
collect payment beyond merely submitting those requisitions. The affidavit
of William Flynn, Jr., the plaintiff’s vice president, which was attached to
the plaintiff’s memorandum in opposition to summary judgment, provides
some insight into why Greython did not take additional steps to collect
payment from 50 Morgan. Flynn’s affidavit states that on July 25, 2018,
‘‘Greython advised [the plaintiff] that [50 Morgan] had obtained new funding
for the Project and that [the plaintiff] would be paid in full with proceeds
from the loan closing.’’ The affidavit further states that on August 16, 2018,
and January 4, 2019, Greython contacted the plaintiff and reiterated that
the loan closing was taking place and that the plaintiff would be paid in
full with proceeds from the loan. E-mails supporting these statements were
attached to the affidavit as exhibits. The affidavit then states that the closing
never occurred.
The plaintiff did not attempt to show that Greython’s statements about
the closing were made in bad faith. It did not allege, for example, that those
statements were false or misleading. Although the correspondences about
the closing took place after the plaintiff brought its action against Greython,
they nevertheless provide evidence of Greython’s effort to collect payment
from 50 Morgan.