DocketNumber: No. CV 96-390458S
Citation Numbers: 2000 Conn. Super. Ct. 9957
Judges: OWENS, JUDGE.
Filed Date: 8/25/2000
Status: Non-Precedential
Modified Date: 7/5/2016
According to the complaint, the plaintiffs and the Mediplex defendants entered into a written contract on April 19, 1985 (turnkey contract4), pursuant to which the Mediplex defendants were to construct an addition to and renovate the plaintiffs' nursing care facility. In addition, the Mediplex defendants were to finance the construction and renovation and sell the renovated facility to the plaintiffs. The plaintiffs contend that they fully complied with their obligations under the contract and fully paid the defendants for their services and for the facility. They allege, however, that from approximately July 18, 1990, through August 10, 1990, the Mediplex defendants breached the contract in various specified ways and that the plaintiffs have been damaged as a proximate result of the breach. The plaintiffs claim that the same conduct by the Mediplex defendants constitutes negligence. In addition, the plaintiffs contend that the Mediplex defendants had a duty to disclose material facts to them regarding the renovation and construction work. They allege that the defendants breached this duty by failing to disclose that the work did not conform to the plans and specifications, was not performed in a good and workmanlike manner, and was not completed in compliance with statutes, regulations, codes, ordinances, and licenses. This conduct, according to the plaintiffs, gives rise to causes of action for fraudulent, reckless and negligent concealment and negligent, reckless and intentional misrepresentation. The plaintiffs also contend that the Mediplex defendants' actions were unfair and deceptive, in violation of CUTPA.
In their motion for summary judgment, the Mediplex defendants assert that the plaintiffs' causes of action against them for breach of contract and negligence are barred pursuant to the doctrine of accord and satisfaction. In addition, they contend that all of the counts asserted against them are barred by the applicable statutes of limitations. In CT Page 9959 opposition to the motion, the plaintiffs argue that genuine issues of material fact exist on the following: whether the Mediplex defendants can meet all of the elements of accord and satisfaction; whether the statute of limitations for their cause of action for breach of contract was tolled pursuant to the doctrine of continuing course of conduct; and whether the statutes of limitations for all the causes of action asserted against them were tolled pursuant to the doctrine of fraudulent concealment.
"When there is a good faith dispute about the existence of a debt or about the amount that is owed, the common law authorizes the debtor and the creditor to negotiate a contract of accord to settle the outstanding claim. . . . An accord is a contract between creditor and debtor for the settlement of a claim by some performance other than that which is due. Satisfaction takes place when the accord is executed." (Citations omitted; internal quotation marks omitted.) Herbert S. Newman Partners v. CFC Construction Ltd. Partnership,
"To prove an accord and satisfaction, the defendant must show that at the time of the agreement there was a good faith dispute over the existence of a debt or over an amount owed, and that the debtor and the creditor negotiated a contract of accord to settle the claim. . . . The accord must be a new agreement based on new consideration. . . . The proponent must be able to show that there was a meeting of the minds, and that the offer by the debtor was clearly tendered as full satisfaction of the debt and that the payment was knowingly accepted."(Citations omitted.) Munroe v. Emhart Corp.,
The plaintiffs first contend that the Mediplex defendants cannot meet their burden of showing that there was a good faith dispute between the parties at the time they entered into the new contract. They rely on Franco's affidavit in which he states that he did not become aware that the Mediplex defendants had deviated from the requirements of the plans associated with the turnkey contract until after April 19, 1990. (Plaintiffs' Memorandum, Franco Affidavit, ¶ 15.) The correspondence CT Page 9961 between the parties indicates, however, that at least between March, 1989, and January, 1990, the parties were engaged in discussions regarding problems that the plaintiffs were encountering with the adequacy of the roof, the ventilation system in the kitchen, disproof and dining room and the hot water heater and who was responsible for correcting the problems. (Defendants' Memorandum, Exhibits, 1, ¶ 16; Exhibit 2, ¶ 22; Exhibits 2-N, P, S and T.) The Mediplex defendants have shown that there was a dispute between the parties.
The plaintiffs also contend that, because they were not aware that the defendants had deviated from the plans for the project, they have demonstrated that there are questions of material fact on the issue of whether the parties had an agreement, or meeting of the minds, to resolve their dispute over the turnkey contract. "Without a mutual assent, or a `meeting of the minds,' there cannot be a valid accord." Herbert S. Newman Partners v. CFC Construction Ltd. Partnership, supra,
The document that the Mediplex defendants rely to support their claim of accord and satisfaction is a letter from Mediplex Construction Co. to Franco dated April 19, 1990, which purports to "confirm the understanding between [Franco] and Mediplex construction Company of Connecticut, Inc. . . . concerning the following points": (1) Franco's execution of the financing proposal; (2) Mediplex's agreement to reduce the accrued interest on the price of the turnkey contract by $220,000 "[i]n CT Page 9962 consideration of [Franco's] execution of such financing proposal . . . a financing commitment related thereto and the closing of such financing on or prior to May 24, 1990 . . . so long as Meditrust is prepared to provide the full amount of the loan request . . . "(3) Franco's agreement that "Mediplex's punchlist and warranty obligations under the Turnkey Contract are hereby deemed fully satisfied, released and terminated. [Franco's agreement] that the Turnkey Contract has been fully performed by Mediplex, except for those requirements required to be completed in order to close the Meditrust financing." (Defendants' Memorandum, Exhibit 1-C.)
Given the language used in this letter, there are genuine issues of material fact on the question of whether the parties came to a mutual understanding that the agreements they made in this document were intended to resolve their disputes over the turnkey contract. The language does not make it clear that the amount of interest the plaintiffs were required to pay was reduced in consideration for an agreement by the plaintiffs to release the Mediplex defendants from any claims the plaintiffs had against them under the turnkey contract. Rather, the language states that the reduction in interest is offered in consideration for the plaintiffs' execution of the financing documents.
Finally, the plaintiffs contend that this new contract is not a valid contract of accord because it is not supported by new consideration. They base this argument on their contention that the Mediplex defendants were already obligated to complete the project according to the terms of the turnkey contract and plans. The Mediplex defendants contend that this element was met because the plaintiffs agreed to relinquish their claims against the Mediplex defendants in return for the defendants' agreement to reduce the interest due to them by $220,000. "A contract of accord and satisfaction is sufficiently supported by consideration if it settles a monetary claim that is unliquidated in amount." County Fire Door Corp. v. C.F. Wooding Co.,
The defendants have not met their burden of showing that there is no genuine issue of material fact as to the second element of their claim of accord and satisfaction. The Mediplex defendants' motion for summary judgment on the first and third counts as to their claim of accord and satisfaction is denied.
The court must resolve a procedural matter before considering the substantive issues raised by the parties. The Mediplex defendants assert that the plaintiffs should not be allowed to rely on the tolling doctrines of continuing course of conduct and fraudulent concealment because they failed to affirmatively plead them in avoidance of the defendants' statute of limitations defense.
Pursuant to Practice Book §
Even assuming the plaintiffs had properly raised their claims that the doctrines of continuing course of conduct and fraudulent concealment tolled the statutes of limitations, as detailed below, they have not substantiated their claims.
Continuing Course of Conduct (First Count)
The Mediplex defendants move to strike the plaintiffs' cause of action for breach of contract on the ground that this cause of action accrued more than six years before the plaintiffs commenced this action and thus is barred by the statute of limitations. In response, the plaintiffs apparently concede that this cause of action accrued more than six years prior to the date on which they commenced this action. They contend, however, that their action is timely because the statute of limitations was tolled pursuant to the doctrines of continuing course of conduct.6
A cause of action for breach of contract is subject to the six year statute of limitations of General Statutes §
The plaintiffs' cause of action for breach of contract is premised on allegations that the Mediplex defendants failed to prepare the plans and specifications adequately, timely, competently and in a good and workmanlike manner, and failed to hire competent architects and engineers to do so; they failed to perform the construction and renovation work and installation of specific structures and equipment in a good and workmanlike manner and in accordance with plans and specifications, the contract and with applicable laws, codes and regulations, but they CT Page 9965 represented to the plaintiffs that they had done so; and they failed to adequately supervise, inspect and review the construction work. All of these allegations relate to conduct that the Mediplex defendants allegedly engaged in while preparing for, conducting and overseeing the construction and renovation work that they did for the plaintiffs. Although the plaintiffs generally allege that this conduct occurred from approximately July 18, 1990, through August 10, 1990, they do not offer any evidence in support of this allegation. Instead, the evidence indicates that the Mediplex defendants completed the construction and renovation work in March, 1989, and that after March 29, 1989, Franco had full possession of the facility and was using it as a nursing home. (Defendants' Memorandum, Exhibit 2, ¶¶ 14, 16, Exhibit 2-M.) The evidence also indicates that from approximately March, 1989, to April, 1990, the parties engaged in discussions about various items which they characterize as punch list7 and warranty items and that the only work that the Mediplex defendants performed after the plaintiffs took possession involved such items. (Defendants' Memorandum, Exhibit 2, ¶¶ 14, 16, 20; Exhibits 2-M through U.) Furthermore, the evidence does not show that the Mediplex defendants engaged in any construction or repair work after April, 1990. Indeed, according to the evidence, on July 18, 1990, Franco signed an affidavit in which he stated that "within the last 90 days, including the date hereof, no person has furnished any labor, services or materials in connection with the construction or repair of any building or improvements on the [facility]." (Defendants' Memorandum, Exhibit 1, ¶ 20, Exhibit 1-E.) Thus, the plaintiffs' cause of action for breach of contract accrued in April, 1990, at the latest and, absent tolling, would be barred by the six year statute of limitations set out in General Statutes §
Under Connecticut law, "a statute of limitations may be tolled under the . . . continuing course of conduct doctrine, thereby allowing a plaintiff to commence his or her lawsuit at a later date." (Internal quotation marks omitted.) Sherwood v. Danbury Hospital,
The plaintiffs contend that both variations of the doctrine apply in this case. First, although their complaint is devoid of any allegations that the parties had a "special relationship," in their memorandum opposing summary judgment, plaintiffs allege that specific provisions of the agreement between the parties imposed a continuing duty on the Mediplex defendants to notify the plaintiff of any changes in or substitution of materials which would have a materially adverse impact of the quality of the construction.8 The plaintiffs argue that these provisions imposed an obligation on the Mediplex defendants that continued at least until July 18, 1990, the date on which the plaintiffs claim that the Mediplex defendants conveyed the premises to Franco. It is apparent, however, that although July 18, 1990, was the date on which the parties entered into an agreement regarding the financial portions of the turnkey contract, the Mediplex defendants had completed the renovation and construction work at least by April 19, 1990. (Defendants' Memorandum, Exhibit 1-E.) Moreover, it is undisputed that sometime prior to April 19, 1990, the plaintiffs had possession over both the newly constructed and renovated portions of the facility. (Defendants' Memorandum, Exhibit 2, ¶¶ 11, 16.) Even viewed in the manner most favorably to the plaintiffs, neither the allegations of the complaint nor the specific provisions of the turnkey contract cited by the plaintiffs indicate that the parties had a relationship sufficient to support the tolling of the limitations period to July 18, 1990. At most they had an on-going business relationship and any duty the Mediplex defendants may have had to inform the plaintiffs about changes in and substitutions of materials expired when the defendants finished the renovation and construction work CT Page 9967 and the plaintiffs resumed their control over the facility. Although "[w]hat is meant by the special relationship required by this principle is not clear . . . it does mean something more than evidence of either a terminated . . . or on-going relationship." (Citations omitted.) Rivera v. Fairbank Management Properties, Inc.,
The plaintiffs also assert that the second variation of the continuing course of conduct doctrine applies to this case. Pursuant to this variation, "a precondition for the operation of the continuing course of conduct doctrine is that the defendant must have committed an initial wrong upon the plaintiff. . . . A second requirement for the operation of the . . . doctrine is that there must be evidence of the breach of a duty that remained in existence after commission of the original wrong related thereto. . . . This court has held this requirement to be satisfied when there was wrongful conduct of a defendant related to the prior act." (Citations omitted; internal quotation marks omitted.) Sherwood v. Danbury Hospital, supra,
The plaintiffs again base their argument on their contention that the Mediplex defendants had a continuing duty to inform them of changes in and substitutions of materials and that the defendants engaged in subsequent wrongful conduct by not informing them that they had done so. Even assuming that the Mediplex defendants had a duty to supervise, inspect and review the construction work, as is alleged by the plaintiffs, the evidence indicates that the Mediplex defendants completed the renovation and construction work by April, 1990, and that after that date, they were no longer in control of the facility. Thus to the extent that the Mediplex defendants may have had a continuing duty to the plaintiffs, the duty expired as of April, 1990.
Moreover, case law indicates that in order to rely on this tolling doctrine, the plaintiffs must show that the Mediplex defendants engaged in "subsequent wrongful conduct" apart from their failure to notify the plaintiffs of changes in and substitutions of materials. Fichera v. Mine Hill Corp.,
The Mediplex defendants have presented evidence that the plaintiffs' cause of action for breach of contract is barred by the statute of limitations and that the plaintiffs failed to show that the statute was tolled pursuant to the doctrine of continuing course of conduct.
Fraudulent Concealment (First and Third through Seventh Counts)
In the third through fifth and seventh counts of the operative complaint, the plaintiffs assert causes of action against the Mediplex defendants for negligence, fraudulent, reckless and negligent concealment, negligent, reckless and intentional misrepresentation and violation of CUTPA, respectively. The Mediplex defendants move for summary judgment on these counts on the grounds that these causes of action accrued more than three years before the plaintiffs commenced this lawsuit and thus are barred by the applicable statutes of limitations. In opposition to the motion, the plaintiffs contend that these causes of action, as well as their cause of action for breach of contract, are timely because the statutes of limitations were tolled pursuant to the doctrine of fraudulent concealment, as codified in General Statutes §
The plaintiffs' causes of action for negligence, negligent and reckless concealment and negligent and reckless misrepresentations are governed by the limitations of General Statutes §
The plaintiffs' causes of action for fraudulent and reckless concealment and reckless and intentional misrepresentation are governed by the limitations of General Statutes §
Pursuant to CUTPA, "[a]n action . . . may not be brought more than three years after the occurrence of a violation of this chapter." General Statutes §
According to the operative complaint, the plaintiffs' tort-based causes of action and their CUTPA claim are premised on the same allegations that they asserted in their cause of action for breach of contract. The plaintiffs specifically allege that this conduct occurred from approximately July 18, 1990, through August 10, 1990. Because the plaintiffs did not commence this action until July 17, 1996, it is clear that these causes of action are barred by the applicable statutes of limitations unless the plaintiffs can show that the statutes were tolled. The plaintiffs appear to concede that this point, and argue that the statutes of limitations were tolled pursuant to the doctrine of fraudulent concealment.
General Statutes §
As to the first element, the plaintiffs contend that because the Mediplex defendants performed the construction and renovation work on the facility, prepared the plans for the work, ordered the materials used in the project, and had possession and control of the portions of the facility under renovation and construction, they must have had actual knowledge of the facts necessary to establish the Plaintiffs' cause of action." (Plaintiffs' Memorandum, p. 14.). They do not, however, present evidence sufficient to raise a genuine issue of fact on this element. Instead, they rely solely on their allegations that such knowledge should be imputed to the defendants. In Bartone v. Robert L. Day Co. Inc., supra,
As to the second and third elements, the plaintiffs claim that the defendants' failure to disclose the changes that were made in the materials used in the project is evidence that the Mediplex defendants intended to conceal the changes from the plaintiffs and did so to delay the plaintiffs in filing this lawsuit. They also contend that the course of dealing between the parties beginning in January, 1990, when the plaintiffs wrote to the Mediplex defendants regarding the adequacy of the hot water heater and threatened legal action, evidences such intent. In order to meet the third element, however, the plaintiffs must present evidence that the defendants' actions were "directed to the very point of obtaining the delay of which [they] afterward [seek] to take advantage by pleading the statute." (Internal quotation marks omitted.) Bartone v. Robert L. Day Co. Inc., supra,
Finally, the doctrine of fraudulent concealment cannot be used to toll a statute of limitations "when the plaintiff discovers some form of actionable harm." Mountaindale Condominium Assn., Inc. v. Zappone, ___ Conn. App. ___, Docket No. AC 18538, (scheduled for publication in the Connecticut Law Journal, August 15, 2000.) "`Actionable harm' occurs when the plaintiff discovers, or in the exercise of reasonable care should have discovered, the essential elements of a cause of action." Lambert v. Stovell,
"[I]t is incumbent upon the party opposing summary judgment to establish a factual predicate from which it can be determined, as a matter of law, that a genuine issue of material fact exists." Connell v. Colwell, supra,
The plaintiffs have failed to meet their burden of showing that there is a genuine issue of material fact as to the first and third elements of their claim of fraudulent concealment and have thus failed to show that the statutes of limitations for their causes of action should be tolled on this basis. Mediplex defendants' motion for summary judgment as to the first, third, fourth, fifth and seventh counts is granted.
Owens, J. CT Page 9972