author: DIPENTIMA, J.

text:
    GERALDINE BENTON ET AL. v. GARY SIMPSON
    (AC 22674)
    Lavery, C. J., and West and DiPentima, Js.

      Argued June 5
    officially released August 19, 2003

      Jeffrey R. Bobbin, with whom was Kim E. Rinehart, for the appellant (defendant).

      William B. Barnes, for the appellees (named plaintiff et al.).
   Opinion

DIPENTIMA, J.

The defendant, Gary Simpson, appeals from the judgment of the trial court granting the application for a prejudgment remedy filed by the plaintiffs Geraldine Benton, Pat Buonincontra, Kim Cifatte and Donna Moore. On appeal, the defendant claims that the court improperly (1) held that the plaintiffs had established probable cause to show intentional infliction of emotional distress, (2) granted the prejudgment remedy without making an individualized determination of damages for each plaintiff and (3) ordered a prejudgment remedy without consideration of his counterclaims. We disagree and, accordingly, affirm the judgment of the trial court.

The following facts and procedural history are relevant to our resolution of the defendant’s appeal The defendant was the manager of the ECO cartridge program in the office systems division of Pitney Bowes, Inc., in Trumbull. ECO program employees conduct after-market sales. The defendant had managed that department and its employees from its inception in 1995 until August 1, 2001. On January 29, 2001, Moore was hired as the sales supervisor of the ECO sales department, and she reported directly to the defendant.

Benton, Buonincontra and Cifatte were responsible for telephone sales and were required to satisfy a quota specified by the defendant. Those plaintiffs reported directly to the defendant until August 1, 2001, after which date they reported to Moore. The plaintiffs worked in cubicles that were close in proximity to each other and to the defendant’s office.

In a three count complaint dated August 23, 2001, the plaintiffs alleged, inter alia, intentional infliction of emotional distress. On August 23, 2001, the plaintiffs also filed an application for a prejudgment remedy seeking to attach sufficient property of the defendant to secure a monetary award of $500,000. The defendant filed a motion to dismiss the plaintiffs’ application, which the court denied. Following the denial of the defendant’s motion to dismiss, the court conducted an evidentiary hearing on September 24 and 27, 2001. The court heard testimony from four of the live plaintiffs. The fifth plaintiff, Debra Cosentino, also applied for the prejudgment remedy, but did not testily at the hearing and was not awarded a prejudgment remedy.

The court relied on the following facts when it granted the prejudgment remedy. Benton testified that she witnessed the defendant lose his temper six to nine times, including instances such as the following: The defendant displayed anger at her yearly review; used profanity; banged on a filing cabinet; publicly admonished another plaintiff; and made the statements: “You women make me sick, you’re like a cancer,” and, “Geri, you have Alzheimer’s [disease].”

Moore testified that she heard the defendant describe the plaintiffs as a “cancer.” Additionally, when Moore disagreed with the defendant’s assessment of the plaintiffs, he made the statement: “Donna, you are straddling the fence, you will be sore, may even have to take a hot bath tonight.”

Cifatte testified about incidents of being belittled by the defendant and stated that he would get “in your face” or “in your space.” At one point, Cifatte relayed to the defendant that her computer was inoperable, and the defendant responded, “Kim, I am so goddamned sick of hearing about your goddamned computer, if I could shit you out a computer I would.” Cifatte testified that the defendant then hit a file cabinet and stated, “ ‘let’s take this into my office now.’ ” The defendant on a separate occasion made the statement to Cifatte, “You women make me sick, you disgust me, I feel sorry for anybody that has to work for you.”

Buonincontra testified that she was present at a meeting where the defendant described the plaintiffs as a “cancer.” She further witnessed the defendant bang his fist to make a point and was a party to an exchange with the defendant when he followed her as she walked away from him and shouted at her.

The court found that those incidents caused emotional stress for each individual plaintiff. The court granted the application ordering an attachment on the equity in the defendant’s home in the amount of $25,000 for each plaintiff, Benton, Buonincontra, Cifatte and Moore. This appeal followed.

I

The defendant first claims that the court improperly found that there was probable cause to grant the prejudgment remedy on two different grounds. First, the defendant argues that the court used an improper legal standard when it evaluated the plaintiffs’ claims. Second, the defendant argues that the court acted improperly in finding probable cause to grant the prejudgment remedy in that his conduct was not extreme and outrageous. As a subordinate argument to the second ground, the defendant argues that it would be contrary to public policy to award a prejudgment remedy in the workplace setting. We address each argument in turn.

At the outset, we set forth the relevant portions of the prejudgment remedy statutes. General Statutes § 52-278d (a) provides in relevant part that a hearing on a prejudgment remedy “shall be limited to a determination of . . . whether or not there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in the matter in favor of the plaintiff .... If the court, upon consideration of the facts before it and taking into account any . . . counterclaims . . . finds that the plaintiff has shown probable cause that such a judgment will be rendered in the matter in the plaintiffs favor in the amount of the prejudgment remedy sought and finds that a prejudgment remedy securing the judgment should be granted, the prejudgment remedy applied for shall be granted as requested or as modified by the court. . . .”

The role of the trial court in considering an award of a prejudgment remedy is well established. “Pursuant to our prejudgment remedy statutes . . . the trial court’s function is to determine whether there is probable cause to believe that a judgment will be rendered in favor of the plaintiff in a trial on the merits. . . . The hearing in probable cause for the issuance of a prejudgment remedy is not contemplated to be a full scale trial on the merits of the plaintiffs claim. The plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim. . . . The court’s role in such a hearing is to determine probable success by weighing probabilities.” (Citations omitted; internal quotation marks omitted.) Bank of Boston Connecticut v. Schlesinger, 220 Conn. 152, 156, 595 A.2d 872 (1991).

Prejudgment remedy proceedings “are not involved with the adjudication of the merits of the action brought by the plaintiff or with the progress or result of that adjudication. They are only concerned with whether and to what extent the plaintiff is entitled to have property of the defendant held in the custody of the law pending adjudication of the merits of that action.” (Internal quotation marks omitted.) Cahaly v. Benistar Property Exchange Trust Co., 73 Conn. App. 267, 273, 812 A.2d 1, cert. granted on other grounds, 262 Conn. 925, 814 A.2d 378 (2002), quoting E. J. Hansen Elevator, Inc. v. Stoll, 167 Conn. 623, 629-30, 356 A.2d 893 (1975).

“The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a [person] of ordinary caution, prudence and judgment, under the circumstances, in entertaining it. . . . Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false.” (Citation omitted; emphasis in original; internal quotation marks omitted.) Three S. Development Co. v. Santore, 193 Conn. 174, 175, 474 A.2d 795 (1984).

“This court’s role on review of the granting of a prejudgment remedy is very circumscribed. It is not to duplicate the trial court’s weighing process, but rather to determine whether its conclusion was reasonable. In the absence of clear error, this court should not overrule the thoughtful decision of the trial court, which has had an opportunity to assess the legal issues which may be raised and to weigh the credibility of at least some of the witnesses.” (Internal quotation marks omitted.) Id., 176. “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.) 24 Leggett Street Ltd. Partnership v. Beacon Industries, Inc., 239 Conn. 284, 301, 685 A.2d 305 (1996).

A

The defendant first argues that the court used an improper legal standard when it evaluated the plaintiffs’ claims. Specifically, the defendant asserts that each plaintiff was required to demonstrate probable cause to sustain an individual claim against him for intentional infliction of emotional distress. The defendant argues that the court should not have granted a prejudgment remedy because the plaintiffs failed to demonstrate those individualized claims, and the court improperly considered his conduct toward the plaintiffs in the aggregate. Applying the requisite limited scope of review, we conclude that the claim must fail.

The law relevant to an allegation of intentional infliction of emotional distress provides the following: “[F]or the plaintiff to prevail in a case for liability under . . . [intentional infliction of emotional distress], four elements must be established. It must be shown: (1) that the actor intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct; (2) that the conduct was extreme and outrageous; (3) that the defendant’s conduct was the cause of the plaintiffs distress; and (4) that the emotional distress sustained by the plaintiff was severe. . . . Whether a defendant’s conduct is sufficient to satisfy the requirement that it be extreme and outrageous is initially a question for the court to determine. . . . Only where reasonable minds disagree does it become an issue for the jury. . . . Liability for intentional infliction of emotional distress requires conduct that exceeds all bounds usually tolerated by decent society.” (Internal quotation marks omitted.) Carnemolla v. Walsh, 75 Conn. App. 319, 331-32, 815 A.2d 1251, cert. denied, 263 Conn. 913, 821 A.2d 768 (2003).

In this case, the plaintiffs claim that the defendant’s conduct toward individual plaintiffs constituted intentional infliction of emotional distress with respect to those plaintiffs who witnessed the defendant’s actions. After evaluating each plaintiffs testimony at the hearing, including evidence of depression, anxiety and other serious physical conditions associated with stress, the court found that the evidence suggested that each individual plaintiff had experienced emotional distress. Thus, the court did evaluate probable cause with respect to each plaintiff. The court concluded that “there is probable cause to believe that a judgment will be rendered in favor of the plaintiffs Geraldine Benton, Pat Buonincontra, Kim Cifatte and Donna Moore.” We do not find clear error in the court’s determination.

B

The defendant next argues that the court improperly determined that his conduct was extreme and outrageous. We disagree.

“liability for intentional infliction of emotional distress requires conduct that exceeds all bounds usually tolerated by decent society .... Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, ‘Outrageous!’ . . . Conduct on the part of the defendant that is merely insulting or displays bad manners or results in hurt feelings is insufficient to form the basis for an action based upon intentional infliction of emotional distress.” (Citations omitted; internal quotation marks omitted.) Appleton v. Board of Education, 254 Conn. 205, 210-11, 757 A.2d 1059 (2000).

In this case, the court found that there was probable cause to believe that the plaintiffs’ action would be successful. The court stated that “[w]hile some may question whether the defendant’s conduct, which was clearly rude, unpleasant and, on one or two occasions, crude, rises to the level that is necessary to establish a claim for intentional infliction of emotional distress, this court nevertheless concludes that [the plaintiffs] have met their burden with respect to a prejudgment remedy.” Moreover, because the plaintiffs and defendant worked in close proximity to one another and because of the nature of the employment relationship, it was difficult for the plaintiffs to avoid continued interaction with the defendant. Indeed, the testimony shows that at least one plaintiff felt compelled to endure the defendant’s conduct.

After reviewing the record and transcripts, and considering the trial court’s unique role in weighing and assessing the testimony of the parties, we do not find clear error in the court’s decision. See Solomon v. Aberman, 196 Conn. 359, 376-77, 493 A.2d 193 (1985).

The defendant further argues that granting a prejudgment remedy in this case may have a detrimental effect on relations between employers and employees throughout the state. The defendant relies on Perodeau v. Hartford, 259 Conn. 729, 762, 792 A.2d 752 (2002), for the proposition that this lawsuit is against public policy. That case held that “an individual municipal employee may not be found liable for negligent infliction of emotional distress arising out of conduct occurring within a continuing employment context, as distinguished from conduct occurring in the termination of employment.” Id., 762-63. The Perodeau court held that if such claims were permitted, “employees who fear lawsuits by fellow employees may . . . promote the interests of their employer less vigorously, may refrain from reporting the improper . . . conduct of fellow employees, may be less frank in performance evaluations, and may make employment decisions . . . on the basis of fear of suit rather than business needs and desires.” Id., 758. The court stated that “[a]ll of this conduct would contribute to a less vigorous and less productive workplace,” and concluded that such a “pervasive chilling effect outweighs the safety interest of employees in being protected from negligent infliction of emotional distress.” Id. The court in Perodeau is silent, however, on the issue of limiting liability for claims sounding in intentional infliction of emotional distress.

The defendant argues that the public policy concerns addressed by the Perodeau court regarding negligent infliction of emotional distress caution against a relaxed standard for finding that workplace conduct can give rise to liability for intentional infliction of emotional distress. There is a distinction between negligent and intentional emotional distress, however, that does not warrant such an extension of Perodeau.

To establish a claim of negligent infliction of emotional distress, a plaintiff must show that “the defendant should have realized that its conduct involved an unreasonable risk of causing emotional distress and that that distress, if it were caused, might result in illness or bodily harm.” (Internal quotation marks omitted.) Id., 749. “[R]ecovery for unintentionally-caused emotional distress does not depend on proof of either an ensuing physical injury or a risk of harm from physical impact.” (Internal quotation marks omitted.) Id.

The difference between the two torts of inflicting emotional distress is significant. As noted by Associate Justice David M. Borden recently, it is less onerous to prove the tort of negligent infliction of emotional distress. “[Wjith respect to proof of the defendant’s tortious conduct, the plaintiff has a more difficult burden when the defendant’s state of mind is intentional, rather than negligent. . . . [W]here the defendant’s state of mind is purposefully to inflict emotional distress on the plaintiff, the plaintiff may not recover unless the defendant’s conduct in pursuance of that intent is also extreme and outrageous; but where the defendant did not have such a malevolent state of mind, but merely was negligent, the plaintiff may recover without having to prove that the conduct engaged in by the defendant was extreme and outrageous.” Carrol v. Allstate Ins. Co., 262 Conn. 433, 452, 815 A.2d 119 (2003) (Borden, J., concurring). Thus, “the more culpable the defendant’s state of mind, the more difficult the plaintiffs burden of persuasion will be on the conduct element of the tort, and, therefore, the less likely it is that the defendant will be held hable.” Id.; see also Scanlon v. Connecticut Light & Power Co., 258 Conn. 436, 446, 782 A.2d 87 (2001).

Further, because recovery for intentional infliction of emotional distress, unlike that for negligent infliction of emotional distress, requires an intent to cause injury; see DeLaurentis v. New Haven, 220 Conn. 225, 267, 597 A.2d 807 (1991); the safety interest of employees in being protected from intentional infliction of emotional distress is greater than the “safety interest of employees in being protected from negligent infliction of emotional distress.” Perodeau v. Hartford, supra, 259 Conn. 758. Consequently, the policy concerns expressed by the Perodeau court are not readily applicable to claims of intentional infliction of emotional distress.

In light of the distinctive requirements of the two claims, we see no reason to extend the holding of Perodeau to apply to claims of intentional infliction of emotional distress.

II

The defendant next claims that the court improperly ordered a prejudgment remedy that authorized each of the four plaintiffs to secure a claim for $25,000. The defendant argues that the court failed to consider the claims of the individual plaintiffs in its determination and, in so doing, failed to establish a basis on which to order a prejudgment remedy. We disagree.

“In assessing the appropriateness and scope of a prejudgment remedy, it is the sole role of the court to evaluate the arguments and evidence produced by both parties in order to determine whether sufficient probable cause exists to sustain the plaintiffs claim.” Cahaly v. Benistar Property Exchange Trust Co., supra, 73 Conn. App. 281-82, citing Greenberg, Rhein & Margolis, Inc. v. Norris-Faye Horton Enterprises, Inc., 218 Conn. 162, 166, 588 A.2d 185 (1991).

A court must take into consideration the facts before it as well as any defenses, counterclaims or setoffs in determining whether there is probable cause to grant a prejudgment remedy in the amount sought. See General Statutes § 52-278d (a).

The defendant’s claim that the court acted improperly in granting the prejudgment remedy is not persuasive. Four of the five plaintiffs presented evidence to the court in support of the application for prejudgment remedy. During the hearing, the plaintiffs testified about the “stressful and unpleasant relationship” with the defendant, detailing specific incidents directly impacting each of the plaintiffs and contributing to a hostile work environment. The court evaluated the credibility of the witnesses and found that testimony sufficient to establish probable cause for a prejudgment remedy for the four plaintiffs testifying at the hearing. The court also found that the fifth plaintiff, Cosentino, who also had applied for the prejudgment remedy but did not testify at the hearing, failed to establish probable cause for the claim of intentional infliction of emotional distress. We conclude that the court evaluated the plaintiffs’ claims individually and, therefore, that the prejudgment remedy entered by the court was not improper.

III

The defendant’s final claim is that the court failed to comply with § 52-278d when it refused to consider his potential counterclaims during the prejudgment remedy hearing. The defendant argued, both in his written opposition to the plaintiffs’ application for the prejudgment remedy and at the hearing on the application, that he intended to raise counterclaims in the main action. In essence, the defendant now argues that the court refused to consider the validity of his potential counterclaims. We disagree.

The defendant correctly notes that a court is required to take into account any defenses, counterclaims or setoffs asserted by the defendant. “Section 52-278d explicitly directs the trial court to take into account any counterclaims raised by a party in determining whether there is probable cause that a judgment in the amount sought by the applicant will be rendered. The statute provides in relevant part that the probable cause finding made during a prejudgment remedy hearing and any resulting order shall be made ‘upon consideration of the facts before [the court] and taking into account any defenses, counterclaims or set-offs . . . .’ General Statutes § 52-278d (a). We note the absence of any qualifying language that would condition a court’s obligation to do so on the manner in which the counterclaim has been raised.” (Emphasis in original.) Rafferty v. Noto Bros. Construction, LLC, 68 Conn. App. 685, 690, 795 A.2d 1274 (2002).

In this case, the court considered the defendant’s assertion that a setoff or counterclaim existed to be without merit. In an articulation of its decision, the court found that the defendant’s intended counterclaims would be an improper joinder because they did not arise out of the same transaction or occurrence that was the subject of the plaintiffs’ claims. Thus, it is clear that the court considered the defendant’s potential counterclaims and determined that they would be improper as counterclaims. The court did not make a determination regarding the validity of the defendant’s claims, but noted that “should the defendant file suit [on his claims], he may seek a prejudgment remedy to secure his claims.” We conclude that the court properly considered the defendant’s potential counterclaims pursuant to § 52-278d.

The judgment is affirmed.

In this opinion the other judges concurred.

       The granting or denial of a prejudgment remedy is deemed a final judgment for purposes of appeal. General Statutes § 52-2781 (a).

       This appeal concerns only the four plaintiffs who testified at the hearing on the application and were awarded the prejudgment remedy. Eeferences in this opinion to the plaintiffs, therefore, designate only those plaintiffs concerned with this appeal and excludes Debra Cosentino, a fifth plaintiff named in the complaint.

       The plaintiffs alleged three claims in the complaint: intentional infliction of emotional distress, negligent infliction of emotional distress and invasion of privacy. Subsequent to the granting of the prejudgment remedy but prior to the defendant’s appeal, the plaintiffs abandoned count two in light of Perodeau v. Hartford, 259 Conn. 729, 792 A.2d 752 (2002). The plaintiffs did not pursue a prejudgment remedy with respect to the claim of invasion of privacy.

       The court did not consider the affidavit of the fifth plaintiff.


source: Caselaw Access Project

author: BISHOP, J.

license: Public Domain

text:
    LAYNE R. MILLER ET AL. v. PETER GUIMARAES ET AL.
    (AC 23032)
    Drangmis, Bishop and West, Js.

      Argued May 5
    officially released August 19, 2003

      Jon L. Schoenhom, with whom, on the brief, was Matthew D. Dyer, for the appellants-cross appellees (defendants).

      Mark S. Rosenblit, for the appellees-cross appellants (plaintiffs).
   Opinion

BISHOP, J.

The defendants, Peter Guimaraes and Guimaraes Construction, Inc., appeal from the judgment of the trial court rendered in favor of the plaintiffs, Layne R. Miller and Paula Miller, in connection with an agreement between the parties for the sale of a lot and the construction of a residential dwelling on it. The defendants claim that the court improperly determined (1) that they breached the contract with the plaintiffs and that Peter Guimaraes is personally hable for the breach, (2) that they violated the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., by failing to disclose that the building lot on which the house was to be constructed was in the name of a third party, (3) that they breached their implied duty of good faith and fair dealing, (4) that their refusal to return the plaintiffs’ deposit constituted the tort of conversion, and (5) that the plaintiffs were entitled to an award of attorney’s fees and costs. In their cross appeal, the plaintiffs challenge the determination by the court that the defendants did not perpetrate a fraud by misrepresentation or nondisclosure. The judgment of the trial court is affirmed in part and reversed in part.

The following facts and procedural history are relevant to our discussion of the issues. On or about the second week of February, 1999, the plaintiffs, who are husband and wife, were driving by a subdivision that was being constructed and saw lot 31, an empty lot, located at 121 Boulder Drive in Rocky Hill. On the lot was a sign with the name Guimaraes Construction, Inc. Because the plaintiffs were interested in possibly purchasing the lot, they contacted Peter Guimaraes (contractor), the president of Guimaraes Construction, Inc., who met with them on that lot on the same day.

When the plaintiffs expressed interest in purchasing the lot, the contractor told them that he would sell it to them even though he had reserved it for himself. To reserve the lot, the plaintiffs issued a check on February 16,1999, in the amount of $1000, payable to Guimaraes Construction, Inc., as a deposit. The check was deposited into the bank account of Guimaraes Development, Inc., another company owned by the contractor, because Guimaraes Construction, Inc., did not have a bank account.

On March 6, 1999, the plaintiffs, along with Paula Miller’s mother, Evelyn Volpe, met with the contractor to view other houses built by the contractor in the subdivision. During that visit, the contractor told Volpe that he had reserved lot no. 31 for himself, but decided to sell it because business was so good. On April 2, 1999, the plaintiffs entered into a construction contract with Guimaraes Construction, Inc., to purchase lot 31 and for the construction of a house on it.

The total contract price was $338,145, apportioned as $95,000 for the lot and $243,145 for the construction of the dwelling. The contract required the plaintiffs to pay $40,000 at signing with the balance of the contract price to be paid as progress installments during construction as permitted by the buyers’ lending institution. The contract also required that the contractor had to obtain all necessary permits on or before April 30,1999, that the buyers had to obtain a mortgage loan commitment on market terms from a bank or other financial institutional lender on or before May 2, 1999, and that the closing was to take place on or before October 2, 1999.

In accordance with the terms of the construction contract, the plaintiffs had deposited a total of $41,000 by April 2, 1999, the date they signed the construction contract. During the first week of April, 1999, the plaintiffs applied for a mortgage loan with American Savings Bank (bank). When the plaintiffs submitted their financial records to the bank the following week, the bank requested blueprints of the residence in conjunction with the processing of the loan application. When the plaintiffs informed the contractor of the bank’s request, he told them that the blueprints were not ready. Instead, he gave them blueprints of a house similar to the one they wanted to have built to facilitate approval of the loan. Upon its receipt of the blueprints, the bank informally approved the loan. Later, by letter dated May 25, 1999, the bank formally approved the plaintiffs’ loan.

At about the same time, the plaintiffs requested blueprints of the home, they also asked the contractor to produce the necessary building permits. They made that request because they had become concerned after being told by a Rocky Hill town official that the contractor had not obtained or even applied for the necessary permits, despite numerous assurances to the plaintiffs that he had done so. Unhappy with those circumstances, the plaintiffs asked the contractor for a refund of their deposit. When, however, the contractor refused to return the plaintiffs’ deposit and told them that if they brought legal action for its return, their legal expenses would eclipse the amount of the deposit, the plaintiffs decided to go forward with the project.

The plaintiffs placed conditions on their agreement to go forward with the construction. Those conditions were that the contractor would obtain all the necessary building permits and produce the construction blueprints on or before the anticipated closing date of June 7, 1999. Notwithstanding his promises, the contractor failed to provide any evidence of having obtained the building permits by June 7,1999. At about the time that the plaintiffs confronted the contractor in regard to the building permits, they learned that there were wetlands on the lot and that for the contractor to receive building permits, he first had to obtain wetlands permits.

Subsequently, the plaintiffs’ attorney learned, through a title search, that the contractor did not own lot 31. Rather, the lot was titled in Trinity Ridge Associates Limited Partnership (Trinity Ridge), a party unfamiliar to the plaintiffs. The plaintiffs learned that Trinity Ridge had entered into an agreement dated February 20, 1998, with Guimaraes Development, Inc., an entity with which the plaintiffs had no legal relationship, for the conveyance of lot 31 to the development company with an anticipated closing date of June 20, 1998. That closing did not take place. Additionally, there was no evidence in the agreement between Trinity Ridge and Guimaraes Development, Inc., that either of them had assigned any rights to the property to the contractor.

The parties’ relationship further deteriorated over a dispute regarding the amount of funds the contractor demanded that the plaintiffs bring to the closing. Because the contractor did not presently own lot 31, he required adequate funds to purchase the property from Trinity Ridge to be able to convey it to the plaintiffs. As a consequence, he demanded that the plaintiffs bring funds to the closing in an amount greater than the plaintiffs thought necessary. From the plaintiffs’ perspective, the $41,000 deposit they already had paid the contractor was to be allocated, in its entirety, to the closing on the lot. To the contrary, the contractor took the position that the deposit paid at the time the parties contracted was to be applied to the construction of the dwelling. Because the bank did not advance to the plaintiffs the entire additional funds the contractor required of them at the closing, compliance with his demands would have required the plaintiffs to produce additional funds from their own resources greater than they believed reasonable or contemplated in their agreement with the contractor. The parties surmounted that disagreement and determined to proceed, setting a new closing for June 17, 1999, a date by which the contractor had to produce all required building permits and final house blueprints. When by June 17, 1999, the contractor had produced no building permits and had furnished no blueprints, the plaintiffs made demand for a return of their $41,000 deposit.

As a result of the contractor’s refusal to return the plaintiffs’ deposit, the plaintiffs commenced this action against the defendants, alleging fraudulent misrepresentation (count one), violations of CUTPA (count two), common-law conversion (count three), breach of contract (count four), and breach of the implied duty of good faith and fair dealing (count five). In turn, the defendants filed an answer together with a claim of setoff and a counterclaim, alleging breach of contract (count one) and breach of the duty of good faith and fair dealing (count two). The court found for the plaintiffs on all counts of the complaint except count one, which alleged fraudulent misrepresentation, and rendered judgment in favor of the plaintiffs on the defendants’ counterclaims. Last, the court determined that the defendants’ claim of setoff for damages stemming from the plaintiffs’ alleged breach of contract was not factually supported. This appeal followed. Additional facts will be set forth as necessary.

I

The defendants’ first claim is that the court improperly determined that they breached the contract with the plaintiffs and that the contractor was hable personally for that breach. We disagree.

Before addressing the merits of the defendants’ claim, we set forth our standard of review. “With regard to the trial court’s factual findings, the clearly erroneous standard of review is appropriate. ... A factual finding is clearly erroneous when it is not supported by any evidence in the record or when there is evidence to support it, but the reviewing court is left with the definite and firm conviction that a mistake has been made. . . . Simply put, we give great deference to the findings of the trial court because of its function to weigh and interpret the evidence before it and to pass upon the credibility of witnesses. . . .

“The trial court’s legal conclusions are subject to plenary review. [WJhere the legal conclusions 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 . . . .” (Citations omitted; internal quotation marks omitted.) Tuxis-Ohr’s, Inc. v. Gherlone, 76 Conn. App. 34, 38-39, 818 A.2d 799, cert. denied, 264 Conn. 907, 826 A.2d 179 (2003).

“In determining whether a failure to render or to offer performance is material, the following circumstances are significant: (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; [and] (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.” (Internal quotation marks omitted.) 669 Atlantic Street Associates v. Atlantic-Rockland Stamford Associates, 43 Conn. App. 113, 126, 682 A.2d 572, cert. denied, 239 Conn. 949, 950, 686 A.2d 126 (1996). The determination of whether a breach is material is a question of fact to be reversed only if found to be clearly erroneous. See Bernstein v. Nemeyer, 213 Conn. 665, 670, 570 A.2d 164 (1990).

The court correctly found in its memorandum of decision, filed April 18, 2002, that the defendants had breached their contract with the plaintiffs in two respects. First, the “breach consisted of the defendants placing an additional money requirement on the [plaintiffs], which was not called for under the terms of the construction agreement, that is, the need to bring $38,000 to the closing in order to buy the lot. [Second, the] breach consisted of the failure of the defendants to get the necessary permits by either June 7, 1999, or June 17, 1999, the [plaintiffs] having agreed to extend the date of April 30, 1999, specified in the construction agreement.”

Although it is not clear from the language of the contract that the deposit given by the plaintiffs was to be applied toward the purchase price of the lot or the construction of the home, we agree with the court’s reasoning that a logical inference from the agreement is that the deposit should have been credited, in its entirety, to the lot purchase. In relevant part, the contract stated that the “balance of $298,145.00 [had] to be paid throughout the construction phases according to buyer[s’] bank disbursements.” That “balance” clearly refers to the balance of the entire contract price of $338,145, and contemplates the previous payment of $41,000 by the plaintiffs toward the purchase of the lot. If any of the $41,000 deposit were to be applied toward construction costs, there would have been no reason to contemplate that the balance of funds beyond $41,000 would be paid “according to the buyerfs’] bank disbursements.” Thus, it is logical to read the contract as not requiring the plaintiffs to bring any additional money to the closing beyond that already paid and that which the bank was willing to advance for purposes of closing on the lot.

Furthermore, the contractor failed to obtain the necessary permits, despite the plaintiffs’ agreement to extend the deadline to June 7 and again to June 17,1999, for the contractor to obtain the permits. The defendants’ argument that the reference in the last modification of the contract to October 2, 1999, as the contemplated closing date does not belie the parties’ agreement that the contractor would finally produce the necessary permits and building plans on or before June 17, 1999.

The defendants claim additionally in their reply brief that the court improperly found that they had breached their contract with the plaintiffs because the parol evidence rule “prohibited the trial court from considering testimony of Layne Miller concerning his interpretation of the contract provision requiring ‘all necessary permits’ by April 30, 1999, concerning the existence of an alleged oral agreement to have final house plans ready by the closing date, and concerning his belief that the entire $40,000 deposit was to be applied to the purchase of the lot before any construction commenced.”

“As we have . . . often noted, the parol evidence rule is not a rule of evidence, but a substantive rule of contract law. . . . The rule is premised upon the idea that when the parties have deliberately put their engagements into writing, in such terms as import a legal obligation, without any uncertainty as to the object or extent of such engagement, it is conclusively presumed, that the whole engagement of the parties, and the extent and manner of their understanding, was reduced to writing. After this, to permit oral testimony, or prior or contemporaneous conversations, or circumstances, or usages ... in order to learn what was intended, or to contradict what is written, would be dangerous and unjust in the extreme.

“The parol evidence rule does not of itself, therefore, forbid the presentation of parol evidence, that is, evidence outside the four comers of the contract concerning matters governed by an integrated contract, but forbids only the use of such evidence to vary or contradict the terms of such a contract. Parol evidence offered solely to vary or contradict the written terms of an integrated contract is, therefore, legally irrelevant. When offered for that purpose, it is inadmissible not because it is parol evidence, but because it is irrelevant. By implication, such evidence may still be admissible if relevant (1) to explain an ambiguity appearing in the instrument; (2) to prove a collateral oral agreement which does not vary the terms of the writing; (3) to add a missing term in a writing which indicates on its face that it does not set forth the complete agreement; or (4) to show mistake or fraud. . . . These recognized exceptions are, of course, only examples of situations [in which] the evidence (1) does not vary or contradict the contract’s terms, or (2) may be considered because the contract has been shown not to be integrated; or (3) tends to show that the contract should be defeated or altered on the equitable ground that relief can be had against any deed or contract in writing founded in mistake or fraud.” (Internal quotation marks omitted.) Schilberg Integrated Metals v. Continental Casualty Co., 263 Conn. 245, 277-78, 819 A.2d 773 (2003).

Our review of the record leads us to the conclusion that the evidence allowed by the court over the defendants’ objections was admitted properly to clarify ambiguous provisions of the contract and not to vary or to contradict its terms. Under those circumstances, we conclude that the court’s findings are not clearly erroneous.

Having found that Guimaraes Construction, Inc., breached its contract with the plaintiffs, the court additionally pierced the corporate veil to hold its president personally liable for the breach.

“Our Supreme Court has held that we may disregard the fiction of a separate legal entity to pierce the shield of immunity afforded by the corporate structure in a situation in which the corporate entity has been so controlled and dominated that justice requires liability to be imposed on the real actor. . . . Additionally, the court has affirmed judgments disregarding the corporate entity and imposing individual stockholder liability when a corporation is a mere instrumentality or agent of another corporation or individual owning all or most of its stock. . . .

“When determining whether piercing the corporate veil is proper, our Supreme Court has endorsed two tests: the instrumentality test and the identity test. The instrumentality rule requires, in any case but an express agency, proof of three elements: (1) Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; (2) that such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest or unjust act in contravention of plaintiff [s’] legal rights; and (3) that the aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.” (Citations omitted; internal quotation marks omitted.) Mountview Plaza Associates, Inc. v. World Wide Pet Supply, Inc., 76 Conn. App. 627, 632-34, 820 A.2d 1105 (2003). The determination of whether the requirements of the instrumentality and identity rules were met is a question of fact to be reversed only if found to be clearly erroneous. Davenport v. Quinn, 53 Conn. App. 282, 302, 730 A.2d 1184 (1999).

Here, the court found that the contractor had treated his two companies, Guimaraes Development, Inc., and Guimaraes Construction, Inc., as if they were the same entity. Guimaraes Construction, Inc., did not have a bank account and, as a result, the contractor, as its president, deposited the plaintiffs’ $41,000 into the account of Guimaraes Development, Inc. As noted at oral argument, the corporation had no assets in its name. Additionally, the court found that the contractor had exercised complete domination over the policy and business of Guimaraes Construction, Inc. On the basis of our review of the record, we conclude that the factual underpinning found by the court in its determination to pierce the corporate veil was not clearly erroneous.

II

The defendants’ second claim is that the court improperly determined that they had breached their implied duty of good faith and fair dealing. We disagree.

As a preliminary matter, we set forth our standard of review. “[W]here the legal conclusions 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 decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.” (Internal quotation marks omitted.) Kenney v. Healey Ford-Lincoln-Mercury, Inc., 53 Conn. App. 327, 330, 730 A.2d 115 (1999).

“It is axiomatic that the . . . duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship. . . . [E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement .... 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. ... In accordance with these authorities, the 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.” (Citations omitted; internal quotation marks omitted.) Macomber v. Travelers Property & Casualty Corp., 261 Conn. 620, 638, 804 A.2d 180 (2002).

To recover for breach of the duty of good faith and fair dealing, the plaintiffs had to “allege and prove that the defendants] engaged in conduct design[ed] to mislead or to deceive ... 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 . . . .” (Emphasis in original; internal quotation marks omitted.) Hunte v. Amica Mutual Ins. Co., 68 Conn. App. 534, 544-475, 792 A.2d 132 (2002).

At the outset, we note that the parties are in agreement that they entered into a valid and enforceable contract. Our review of the record reveals that the court correctly concluded that the plaintiffs had pleaded and proved sufficient facts to support a cause of action for breach of the implied covenant of good faith and fair dealing on the basis of their claims that the defendants had obtained the plaintiffs’ deposit without telling them that they did not own lot 31, that they failed to secure the necessary permits in a timely manner, that they did not produce final construction plans by the anticipated closing date, that they required the plaintiffs to bring additional funds to the closing when that was not otherwise required by the language of the parties’ contract and that they failed to inform the plaintiffs that wetlands permits were needed before they could obtain the necessary building permits. Additionally, the court noted that when the plaintiffs asked for the return of their deposit, the contractor told them that it would cost them more in legal fees than any possible recovery they could obtain through litigation. Under those facts, it was not improper for the court to be “satisfied that the defendants engaged in conduct designed to mislead and that this was on the part of the defendants a refusal to fulfill their contractual obligations and that this refusal was not prompted by an honest mistake as to then-duties.”

Ill

The defendants’ third claim is that the court improperly determined that they had violated CUTPA by failing to disclose that the building lot on which the home was to be constructed was in the name of a third party. We disagree.

The defendants challenge the legal conclusion of the court that they had a duty to disclose to the plaintiffs that they did not own lot 31. Also, they assert that the court’s finding that they violated CUTPA was clearly erroneous.

At the outset, we set forth our standard of review. “[W]here the legal conclusions 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 decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.” (Internal quotation marks omitted.) Kenney v. Healey Ford-Lincoln-Mercury, Inc., supra, 53 Conn. App. 330.

CUTPA provides in relevant part that “[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” General Statutes § 42-110b (a). “Connecticut courts, when determining whether a practice violates CUTPA, will consider (1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise — whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other businessmen). . . . Thus, a violation of CUTPA may be established by showing either an actual deceptive practice ... or a practice amounting to a violation of public policy.” (Citation omitted; internal quotation marks omitted.) Kenney v. Healey Ford-Lincoln-Mercury, Inc., supra, 53 Conn. App. 330.

“An act or practice is deceptive if three conditions are met. First, there must be a representation, omission, or other practice likely to mislead consumers. Second, the consumers must interpret the message reasonably under the circumstances. Third, the misleading representation, omission, or practice must be material — that is, likely to affect consumer decisions or conduct.” (Internal quotation marks omitted.) Southington Savings Bank v. Rodgers, 40 Conn. App. 23, 28, 668 A.2d 733 (1995), cert. denied, 236 Conn. 908, 670 A.2d 1307 (1996). “Whether a practice is unfair and thus violates CUTPA is an issue of fact. ... On appellate review, we overturn factual determinations only when they are clearly erroneous.” (Citations omitted; internal quotation marks omitted.) Calandro v. Allstate Ins. Co., 63 Conn. App. 602, 615, 778 A.2d 212 (2001).

Moreover, “[a] failure to disclose can be deceptive only if, in light of all the circumstances, there is a duty to disclose. . . . Regarding the duty to disclose, the general rule is that . . . silence . . . cannot give rise to an action ... to set aside the transaction as fraudulent. ... A duty to disclose will be imposed, however, on a party insofar as he voluntarily makes disclosure. A party who assumes to speak must make a full and fair disclosure as to the matters about which he assumes to speak.” (Citations omitted; internal quotation marks omitted.) Macomber v. Travelers Property & Casualty Corp., supra, 261 Conn. 635-36. Whether the defendants had a duty to disclose is a question of law and, thus, our review is plenary. Id.

We note initially that the court’s conclusion that the defendants had a duty to disclose was legally and logically correct. In that respect, the court stated: “There is no question that the [plaintiffs] were under the impression that the defendants owned lot no. 31. The defendants at no time told the [plaintiffs] that they did not own the lot. As far as [the contractor] was concerned, it was none of the [plaintiffs’] business what his arrangement with the lot was. But for the fact that the defendants were expecting the [plaintiffs] to come up with additional money at the closing to put toward the purchase of the lot, the defendants would have been correct." (Emphasis added.) Under those circumstances, the court’s conclusion that the defendants had a duty to disclose their lack of ownership of the lot was legally and logically correct.

Next, we examine whether the court’s finding that the defendants’ conduct violated CUTPA was clearly erroneous. The court found that “[j]ust before the June 7, 1999 closing was to take place, the [plaintiffs] were told they had to come up with an additional $38,000 to supplement the bank’s $57,000 in order for the defendants to purchase the lot from Trinity Ridge.”

The court stated further that “[t]he problem with not owning the lot is that the defendants looked to the [plaintiffs] to make up any shortfall between what the bank allocated to the cost of the lot and the cost of the lot. This is in spite of the fact that the construction agreement entered into between the [plaintiffs] and the defendants did not provide for other than the $40,000 already given by the [plaintiffs].” On that record, we believe that the court’s determination that the defendants’ failure to disclose their lack of ownership of the lot was deceptive and material to their contractual breach was not clearly erroneous.

IV

The defendants’ fourth claim is that the court improperly determined that their refusal to return the plaintiffs’ deposit constituted the tort of conversion. We disagree.

As a preliminary matter, we note that the court’s determination that the evidence supported the finding of conversion is subject to reversal only if it is clearly erroneous. Aubin v. Miller, 64 Conn. App. 781, 796, 781 A.2d 396 (2001).

The following additional facts are relevant to our discussion of the defendants’ claim. The defendants argue in their reply brief that “the refusal to return the $40,000 deposit upon demand was not conversion because the plaintiffs did not demonstrate that the defendants wrongfully withheld the money.” The defendants maintained that they had a legal claim to the deposit money at the time the plaintiffs allegedly breached the contract and that the plaintiffs had demanded their money back. Additionally, the defendants took issue with the court’s conclusion that they had committed conversion by soliciting the money under false pretenses. The latter determination, the defendants claim, was factually unsupported.

To facilitate our discussion of the court’s decision, we begin by reference to general legal principles regarding the tort of conversion. Generally, “ [conversion is an unauthorized assumption and exercise of the right of ownership over goods belonging to another, to the exclusion of the owner’s rights. ... To establish a prima facie case of conversion, the plaintiffs had to establish that (1) the deposit given to the defendant belonged to the plaintiffs, (2) the defendant deprived the plaintiffs of their funds for an indefinite period of time, (3) the defendants’ conduct was unauthorized and (4) the defendants’ conduct harmed the plaintiffs.” (Citation omitted; internal quotation marks omitted.) Id.

“[T]here are two general classes of conversion: (1) that in which possession of the allegedly converted goods is wrongful from the onset; and (2) that in which the conversion arises subsequent to an initial rightful possession.” (Internal quotation marks omitted.) Luciani v. Stop & Shop Cos., 15 Conn. App. 407, 410, 544 A.2d 1238, cert. denied, 209 Conn. 809, 548 A.2d 437 (1988).

The court correctly found that the defendants’ initial retention of funds from the plaintiffs was improper. As noted by the court, the evidence supports the following conclusions: That the contractor had obtained the deposit of $41,000 from the plaintiffs under false pretenses by failing to disclose that his company, Guimaraes Construction, Inc., did not own lot 31; that when he told the plaintiffs that he had reserved lot 31 for himself, but had then decided to look for property in Avon, the plaintiffs reasonably understood the latter statement as an affirmation that he owned the lot; that, on the basis of his representations, the plaintiffs entered into a contract with the defendants for the sale and construction of a house on lot 31; and that on learning, through a title search, that the defendants did not own the lot, the plaintiffs, to no avail, repeatedly demanded that the defendants return their deposit.

In response, the defendants claimed that they, in fact, had legal title to lot 31 because they had obtained equitable title under the doctrine of equitable conversion. “Under the doctrine of equitable conversion . . . the purchaser of land under an executory contract is regarded as the owner, subject to the vendor’s lien for the unpaid purchase price, and the vendor holds the legal title in trust for the purchaser.” (Internal quotation marks omitted.) Francis T. Zappone Co. v. Mark, 197 Conn. 264, 267, 497 A.2d 32 (1985). That doctrine is unavailing to the defendants because they failed to show the existence of an executory contract between them and Trinity Ridge giving them any rights to the agreement between Trinity Ridge and the lot’s legal owner.

The defendants argued further that even if they did not have equitable title, they had the right to offer the lot for sale pursuant to their standing oral agreement with Antonio Sabatini, the president of Trinity Ridge. Sabatini testified at trial that he had been willing at all times to sell lot 31 to the defendants. The defendants have cited no authority supporting their proposition that Sabatini’s stated willingness to sell lot 31 to either of the defendants, without any prior purchasing agreement with either of them, was sufficient to convey on either of them legal ownership of lot 31. Under those circumstances, the court’s conclusion that the defendants had wrongfully converted the plaintiffs’ funds was not clearly erroneous.

We next turn to the defendants’ claim that there is a contradiction between the court’s finding in an articulation that the defendants’ statements “were sufficiently ambiguous to preclude a finding” of fraudulent nondisclosure and its finding that they had solicited the deposit under “false pretenses.” Because the latter argument by the defendants requires us to discuss the fraudulent misrepresentation claim raised by the plaintiffs on their cross appeal, we will discuss that claim here as well.

The plaintiffs filed an amended complaint on November 15, 2000, to include an allegation of fraudulent concealment by the defendants of the fact that they did not own lot 31. Prior to that amendment, count one of the complaint alleged only fraudulent misrepresentation.

“Fraud consists [of] deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed. . . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment. . . . Additionally, [t]he party asserting such a cause of action must prove the existence of the first three of [the] elements by a standard higher than the usual fair preponderance of the evidence, which higher standard we have described as clear and satisfactory or clear, precise and unequivocal.” (Citation omitted; internal quotation marks omitted.) Giulietti v. Giulietti, 65 Conn. App. 813, 836, 784 A.2d 905, cert. denied, 258 Conn. 946, 947, 788 A.2d 95, 96,97 (2001). The determination of what acts constitute fraud is a question of fact, and we similarly employ the clearly erroneous standard in reviewing the court’s factual findings. See Tanpiengco v. Tasto, 72 Conn. App. 817, 819, 806 A.2d 1080 (2002).

The court opined that the plaintiffs had not proven their claim of fraudulent nondisclosure by clear, precise and unequivocal evidence. The court based its determination on its finding that when the contractor told the plaintiffs and Volpe that he was reserving the lot for himself, his statement was ambiguous enough to “preclude a finding by the court that a false representation, i.e., that he owned the lot, was made by Peter Guimaraes as a statement of fact.” In light of the high burden of proof the plaintiffs had to meet to satisfy their claim of fraudulent misrepresentation, the court properly found that they had not proved that the defendants committed fraud. Given the high threshold of proof required for the plaintiffs to prove their claim of fraudulent misrepresentation, the court’s conclusion by a fair preponderance of evidence that the defendants had solicited the deposit under “false pretenses” was not inherently inconsistent with its finding regarding the plaintiffs’ allegations of fraud. Thus, the court’s finding was not clearly erroneous.

V

The defendants’ last claim is that the court improperly awarded attorney’s fees and costs. We agree as to the defendants’ claim regarding costs, but not as to the award of counsel fees.

The following additional facts are relevant to our discussion of the defendants’ claims regarding counsel fees and costs. After the trial on the merits, the court conducted a hearing to determine counsel fees as permitted under CUPTA. Subsequently, the court ordered counsel fees in the amount of $37,687.50, which included the $3000 due to predecessor counsel. Additionally, the court awarded fees of $1000 for an expert witness who testified as to the reasonable value of counsel fees.

“It is a settled principle of our common law that parties are required to bear their own litigation expenses, except as otherwise provided by statute. . . . Furthermore, because [c]osts are the creature of statute . . . unless the statute clearly provides for them courts cannot tax them.” (Citation omitted; internal quotation marks omitted.) M. DeMatteo Construction Co. v. New London, 236 Conn. 710, 715, 674 A.2d 845 (1996). “Awarding . . . attorney’s fees under CUTPA is discretionary; General Statutes § 42-1 lOg (a) and (d) . . . and the exercise of such discretion will not ordinarily be interfered with on appeal unless the abuse is manifest or injustice appears to have been done.” (Internal quotation marks omitted.) Thames River Recycling, Inc. v. Gallo, 50 Conn. App. 767, 800, 720 A.2d 242 (1998).

The core of the defendants’ claim regarding the award of counsel fees is that a portion of the counsel fees awarded by the court, the sum of $3000, related to a previous case brought by predecessor counsel that had been dismissed because of a failure of service of process. In response, the plaintiffs argued that much of the work done by predecessor counsel in the previous action had been beneficially used by counsel in this action, and that without the use of the effort by predecessor counsel, counsel fees in this matter would have been greater.

On the basis of our review of the record and the court’s memorandum of decision, we conclude that the court did not abuse its discretion by including the sum of $3000 in its total counsel fees award. We find no statutory or discretionary basis, however, for the court’s award of $1000, as taxable costs for an expert who was an attorney. General Statutes § 52-260, relating to witness fees, sets forth the court’s authority to award expert witness fees in civil litigation. Within the statute, there is an enumeration of the categories of experts entitled to a discretionary award of expert witness fees. Legal experts are not included within that enumeration. Accordingly, we conclude that the court was without authority to award, as fees, the sum of $1000 for the expert who testified as to the reasonable fees to be awarded to the plaintiffs’ counsel.

The judgment is reversed only as to the award of $1000 in expert witness fees and the case is remanded with direction to vacate that order. The judgment is affirmed in all other respects.

In this opinion the other judges concurred.

       The defendants also brought counterclaims of breach of contract, and breach of duty of good faith and fair dealing against the plaintiffs. Our resolution of the issues in favor of the plaintiffs disposes of the issues raised by the defendants regarding their counterclaims. They are without merit.

       The relevant provision in the contract on which the defendants rely is article III, which states in relevant part: “Commencement and Completion: Completion means issuance of a permanent unconditioned certificate of occupancy. The contractor agrees to commence work here 10 days after the following: (a) buyer has obtained bank financing and (b) ... all necessary permits on or before April 30, 1999.”

       We note that contrary to the defendant’s contention, a “CUTPA violation need not involve fraud on the part of the violator . . . . ” Lester v. Resort Camplands International, Inc., 27 Conn. App. 59, 71, 605 A.2d 550 (1992).

       By letter dated August 2,1999, the plaintiffs’ attorney advised the defendants that the plaintiffs would consider the contract “null and void” if the defendants did not return the plaintiffs’ deposit by Friday, August 6, 1999. That was because, the letter stated, the defendants had failed to obtain all the necessary permits by April, 30, 1999, despite numerous reassurances that they had done so. The defendants’ claim that the court should have treated the letter as an anticipatory breach is unavailing because the defendants already had breached the contract by failing to comply with the terms of the contract necessary to bring about the closing set for June 17, 1999.


author: McLACHLAN, J.

text:
    BRIAN E. MCKEEVER v. PHILIP FIORE, SR., ET AL.
    (AC 23155)
    Schaller, McLachlan and Peters, Js.

      Argued May 27
    officially released August 19, 2003

      Martin B. Burke, for the appellant-cross appellee (plaintiff).

      Christopher G. Winans, for the appellees-cross appellants (named defendant et al.).
   Opinion

McLACHLAN, J.

In this appeal from the judgment of strict foreclosure rendered in favor of the plaintiff, Brian E. McKeever, the plaintiff claims that the trial court (1) improperly invoked and applied its equitable powers in considering the doctrine of unclean hands, (2) abused its discretion in limiting the award of interest on the debt to a one year period, (3) abused its discretion in limiting attorney’s fees and (4) improperly disallowed late charges on the debt. On cross appeal, the defendants, Philip Fiore, Sr., and Mattea Fiore, contend that the court improperly held that the plaintiff did not have to plead or to prove that General Statutes § 52-592, the accidental failure of suit statute, was applicable to his action. We affirm the judgment of the trial court as to the plaintiffs first three claims and as to the defendants’ cross appeal. We reverse the judgment as to the plaintiffs fourth claim regarding the disallowance of late charges.

The court’s memorandum of decision and the record reveal the following undisputed facts. On August 16, 1989, the plaintiff sold and conveyed title to property at 12-14 School Street in Vernon to Felice Fiore and Ronald S. Cook for $355,000. Fiore and Cook were doing business as Elite Investing (Elite). The purchase price was paid by a first mortgage in the amount of $255,000 and a second mortgage from Elite for $100,000. In addition, the defendants executed and delivered a guarantee of Elite’s obligations under the second mortgage through a note and mortgage on property they owned at 31-33 Smith Street in Danbury (Danbury mortgage).

The Danbury mortgage provided for interest accruing at 13 percent per annum beginning on August 16, 1989, with no payment due until September 1,1992. The note also provided that if any payment was not made within fifteen days after it became due, a late charge of 5 percent of the overdue payment became payable. The amount of the debt on the note secured by the Danbury mortgage as of August 16,1992, was therefore $139,000, which was $100,000 in principal plus three years interest at 13 percent.

Commencing September 1, 1992, Elite was required to make monthly payments of interest only in the amount of $1083.33 until the date of the maturity of the loan, August 16, 1994. When Elite did not make any of the interest payments, the plaintiff declared the loan to be in default by initiating foreclosure proceedings on February 16,1993. On April 23,1993, Elite paid $105,000 in exchange for a release of the mortgage on the Vernon property. No release of the Danbury mortgage was provided, nor was that note endorsed as paid in full.

The meandering procedural history of this litigation begins with the plaintiffs first foreclosure proceeding. The foreclosure action of February, 1993 was dismissed with prejudice on September 19, 1997, by the court when the plaintiff failed to appear for trial. The dismissal was vacated, and the matter was reassigned for trial on January 20, 1999. Again, the plaintiff failed to appear. The case was again dismissed with prejudice. The plaintiff sought unsuccessfully to vacate the second dismissal.

The plaintiff then instituted this foreclosure proceeding on June 24, 1999. The plaintiff asserted at trial that the action was brought under § 52-592, the accidental failure of suit statute, although the statute was not pleaded in the plaintiffs complaint.

On December 22, 1999, the defendants filed their answer and special defenses. On November 13, 2000, the defendants filed a request for leave to amend their answer, seeking to add the doctrine of unclean hands and the statute of limitations as special defenses. The court denied that request on February 21, 2001.

Finally, more than eight years after the plaintiff commenced the initial foreclosure action, this case came to trial. The court, in its memorandum of decision, ruled in favor of the plaintiff, finding a debt of $47,790.60. Citing its equitable powers, the court limited the plaintiffs award of interest to one year and awarded attorney’s fees in the amount of $4200, although the plaintiff had claimed $26,450. Though late charges were provided for in the note, the court denied all late charges. On May 13, 2002, the court rendered judgment of strict foreclosure. These appeals followed.

I

The plaintiffs first claim on appeal is that the court improperly invoked its equitable powers in its financial award because the doctrine of unclean hands was not pleaded as a special defense by the defendants. In addition, the plaintiff argues that even if the court could consider the doctrine, it abused its discretion by finding the doctrine applicable to the facts of this case. We disagree.

A

Whether the court properly invoked the doctrine of unclean hands is a legal question distinct from the court’s discretionary decision as to whether to apply the doctrine. Thompson v. Orcutt, 257 Conn. 301, 308, 777 A.2d 670 (2001). The question whether the clean hands doctrine may be applied to the facts found by the courtis a question of law. Id., 309. We must therefore engage in a plenary review to determine whether the court’s conclusions were legally and logically correct and whether they are supported by the facts appearing in the record. See id.; Andersen Consulting, LLP v. Gavin, 255 Conn. 498, 511, 767 A.2d 692 (2001).

An action of foreclosure is peculiarly an equitable action. Federal Deposit Ins. Corp. v. Hillcrest Associates, 233 Conn. 153, 170, 659 A.2d 138 (1995); Beach v. Isacs, 105 Conn. 169, 176, 134 A. 787 (1926). Hence, the court may consider all relevant circumstances to ensure that complete justice is done. Hartford Federal Savings & Loan Assn. v. Lenczyk, 153 Conn. 457, 463, 217 A.2d 694 (1966).

“[T]he determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court.” (Internal quotation marks omitted.) Connecticut Bank & Trust Co. v. Winters, 225 Conn. 146, 162, 622 A.2d 536 (1993). Discretion means “a legal discretion, to be exercised 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.” (Internal quotation marks omitted.) Hammerberg v. Leinert, 132 Conn. 596, 604-605, 46 A.2d 420 (1946). “For that reason, equitable remedies are not bound by formula but are molded to the needs of justice.” Montanaro Bros. Builders, Inc. v. Snow, 4 Conn. App. 46, 54, 492 A.2d 223 (1985).

In its memorandum of decision, the court mistakenly mentioned, in a footnote, that the defendants had raised the doctrine of unclean hands as a special defense. The record reveals that the defendants had filed a request for leave to amend their answer so as to include that defense, but the court did not allow the amendment. On the basis solely of that footnote and without providing any further support for his claim, the plaintiff contends that the court improperly and erroneously considered the doctrine of unclean hands. We disagree.

Our Supreme Court has insisted that equity must look to substance and not mere form. Bender v. Bender, 258 Conn. 733, 751, 785 A.2d 197 (2001); Connecticut National Bank v. Chapman, 153 Conn. 393, 397, 216 A.2d 814 (1966). “A failure to do equity need not be pleaded by defendant where the pleading on behalf of plaintiff or the proof discloses the inequitable position of plaintiff____” 30A C.J.S. 298, Equity § 96 (1992). We therefore conclude that in light of the court’s inherent equitable powers in a foreclosure action, the court did not improperly consider the equitable doctrine of unclean hands without it being specifically pleaded.

B

The plaintiff next argues that even if the court could consider the doctrine of unclean hands, it improperly concluded that the doctrine was applicable to the facts of this case. We disagree.

The doctrine of unclean hands holds that one who seeks to prove that he is entitled to the benefit of equity must first come before the court with clean hands. Cohen v. Cohen, 182 Conn. 193, 201, 438 A.2d 55 (1980); Sachs v. Sachs, 22 Conn. App. 410, 416, 578 A.2d 649, cert. denied, 216 Conn. 815, 580 A.2d 60 (1990). It expresses the principle that when a plaintiff seeks equitable relief, “he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue.” Bauer v. Waste Management of Connecticut, Inc., 239 Conn. 515, 525, 686 A.2d 481 (1996).

Here, the proceeding was a foreclosure action that was equitable in nature. The plaintiff sought interest for a period of nine years, attorney’s fees and late charges. The court had ample evidence to determine in its memorandum of decision that a period of one year “is more than sufficient to try a case of this nature to a conclusion.” The court had evidence before it that equitable principles warranted a reduction in the amount that the plaintiff was entitled to recover due to the plaintiffs failure to appear twice for trial, the nine year prosecution of the action and the potential for a windfall. We conclude that the court’s application of the doctrine of unclean hands was legally and logically correct and was supported by the facts appearing in the record.

II

The plaintiff next claims that the court abused its discretion in the manner in which it applied the doctrine of unclean hands by limiting the award of interest to a one year period. In the plaintiffs proposed findings of fact submitted to the court on October 9,2001, he sought $113,280.11 in interest. The court awarded him $50,180.21.

The application of the doctrine of unclean hands rests within the sound discretion of the trial court. Thompson v. Orcutt, supra, 257 Conn. 308. When the exercise of judicial discretion is called on, its exercise will not ordinarily be interfered with on appeal. Sturman v. Socha, 191 Conn. 1, 7, 463 A.2d 527 (1983). We are entitled to reverse the court’s exercise of its equitable powers only if that exercise was unreasonable. Connecticut Bank & Trust Co. v. Winters, supra, 225 Conn. 161. Consequently, when we review the exercise of discretion by the trial court, every reasonable presumption will be given in favor of the correctness of its ruling. Camp v. Booth, 160 Conn. 10, 13, 273 A.2d 714 (1970).

The record reveals that the litigation was prolonged in substantial part by the conduct of the plaintiff. The court was understandably “troubled by the extreme lack of diligence in the prosecution of this foreclosure proceeding to a conclusion,” including the two dismissals with prejudice. The court held that a period of one year “is more than sufficient to try a case of this nature to a conclusion.”

“Equity will not afford its aid to one who by his conduct or neglect has put the other party in a situation in which it would be inequitable to place him.” Glotzer v. Keyes, 125 Conn. 227, 231-32, 5 A.2d 1 (1939). Were the defendants forced to pay almost a decade of interest as the plaintiff urges, it would amount to a windfall to him. See Thompson v. Orcutt, 70 Conn. App. 427, 435, 800 A.2d 530, cert. denied, 261 Conn. 917, 806 A.2d 1058 (2002). Accordingly, we conclude that the court did not abuse its discretion in applying the doctrine of unclean hands to limit the award of interest to a one year period.

III

The plaintiff next contends that the court abused its discretion in limiting the award of attorney’s fees. We disagree. The plaintiff requested $26,450 in attorney’s fees, but the court awarded $4200 through trial.

Attorney’s fees in foreclosure actions are within the court’s equitable discretion and are subject to the control of the court, which may, sua sponte, reduce the amount at its discretion or after a hearing if an adverse party contests their validity or reasonableness. See 55 Am. Jur. 2d, Mortgages § 708 (1996); see also Rizzo Pool Co. v. Del Grosso, 240 Conn. 58, 77-78, 689 A.2d 1097 (1997); American Mortgage Corp. v. Hope, 41 Conn. App. 324, 332, 675 A.2d 912 (1996).

In its memorandum of decision, the court stated that it was “seriously troubled by the extreme lack of diligence in the prosecution of this foreclosure proceeding to a conclusion .... Such a lack of diligence is outrageous and cannot be tolerated.” The attorney’s fees at issue were accumulated over a nine year period by three separate counsel. Two of those attorneys failed to appear on dates assigned for trial, causing dismissals of the first action, with prejudice, by two different judges. At trial, both attorneys admitted responsibility for the dismissals.

The record, therefore, supports the court’s conclusion that in this case, equitable principles warranted a reduction in the amount that the plaintiff was entitled to recover. The reasonableness of an award of attorney’s fees may be determined “by the exercise of the trier’s own expert judgment.” Storm Associates, Inc. v. Baumgold, 186 Conn. 237, 246, 440 A.2d 306 (1982). Accordingly, we conclude that the court did not abuse its discretion in awarding attorney’s fees.

IV

The plaintiffs final claim is that the court improperly denied an award of late charges as specifically called for by the Danbury mortgage note. We agree with the plaintiff.

A late charge is allowable under state law. See Hamm v. Taylor, 180 Conn. 491, 493-94, 429 A.2d 946 (1980) (reversing trial court disallowance of 10 percent late charge). Indeed, late charges are routinely awarded. See, e.g., Mechanics Savings Bank v. Tucker, 178 Conn. 640, 646, 425 A.2d 124 (1979); Putnam Park Associates v. Fahnestock & Co., 73 Conn. App. 1, 17, 807 A.2d 991 (2002).

Late charges are contractual items. They compensate a lender for the extra time and effort expended as a result of a borrower’s tardiness in making payments and, thus, are an attempt to provide for liquidated damages. See Putnam Park Associates v. Fahnestock & Co., supra, 73 Conn. App. 16-17; see also 22 Am. Jur. 2d 773, Damages § 717 (1988). As a promissory note “is nothing more than a written contract for the payment of money”; Appliances, Inc. v. Yost, 181 Conn. 207, 210, 435 A.2d 1 (1980); contract law must govern. SKW Real Estate Ltd. Partnership v. Gallicchio, 49 Conn. App. 563, 574, 716 A.2d 903, cert. denied, 247 Conn. 926, 719 A.2d 1169 (1998). For that reason, as stated in Putnam Park Associates v. Fahnestock & Co., supra, 16-17, late charges are “an integral part” of an agreement such as the one at issue. If no award to reflect those liquidated damages were permitted, the plaintiff “would not be made whole.” Id., 17.

That general rule regarding late charges is subject to an exception. Liquidated damage claims that are excessive and do not bear a reasonable relationship to the actual damages sustained will be rendered void as a penalty. Norwalk Door Closer Co. v. Eagle Lock & Screw Co., 153 Conn. 681, 689-90, 220 A.2d 263 (1966); New York Life Ins. Co. v. Hartford National Bank & Trust Co., 2 Conn. App. 279, 280-81, 477 A.2d 1033 (1984).

Here, the note provided that in the event that any payment was not made within fifteen days after it became due, a late charge of 5 percent of the overdue payment would become payable. In its memorandum of decision, the court deemed that late charge a penalty and thereby disallowed any late charges whatsoever, citing its “equitable powers.” We disagree with that determination.

The equitable powers of the court are broad, but they are not without limit. “Equitable power must be exercised equitably. ’ ’ Hamm v. Taylor, supra, 180 Conn. 497. The late charge as provided in the note is clearly reasonable. Indeed, this court repeatedly has affirmed awards of late charges at this precise rate. See, e.g., Berkeley Federal Bank & Trust, FSB v. Ogalin, 48 Conn. App. 205, 214, 708 A.2d 620, cert. denied, 244 Conn. 933, 711 A.2d 726 (1998); Shadhali, Inc. v. Hintlian, 41 Conn. App. 225, 229-30, 675 A.2d 3, cert. denied, 237 Conn. 926, 677 A.2d 948 (1996); Federal Deposit Ins. Corp. v. Napert-Boyer Partnership, 40 Conn. App. 434, 443, 671 A.2d 1303 (1996); Oakland Heights Mobile Park, Inc. v. Simon, 36 Conn. App. 432, 433, 651 A.2d 281 (1994).

In addition, the particular conduct of the lawsuits underlying the court’s determination relative to the plaintiffs unclean hands all occurred after the late charges were incurred. Thus, the equitable considerations at play regarding interest and attorney’s fees had little bearing on the issue of late charges, which were incurred prior to the institution of the first action. We therefore conclude that the court abused its discretion in denying late charges in this instance.

That determination does not end our inquiry. There remains the question of precisely what late charges the plaintiff may collect. A lender may collect late charges for payments not paid by the due date prior to acceleration of the note. Shadhali, Inc. v. Hintlian, supra, 41 Conn. App. 229-30. Late charges no longer are “due” after the lender has instituted an action on the note. Federal Deposit Ins. Corp. v. Napert-Boyer Partnership, supra, 40 Conn. App. 443.

The plaintiffs original action was instituted on February 16, 1993, the date of service of process. Under Federal Deposit Ins. Corp. v. Napert-Boyer Partnership, supra, 40 Conn. App. 434, no late charges are “due” after that date. Consequently, late charges may be assessed only for the time period of September 1, 1992, through February 16, 1993. We therefore remand this case for further proceedings to determine the proper amount of late charges consistent with this decision.

V

In their cross appeal, the defendants argue that the court improperly held that the plaintiff did not have to “plead or prove” the applicability of § 52-592, the accidental failure of suit statute. We disagree.

Deemed a “saving statute,” § 52-592 enables parties to institute actions despite the expiration of the applicable statute of limitations. Pepitone v. Serman, 69 Conn. App. 614, 619, 794 A.2d 1136 (2002). Warranting abroad construction, § 52-592 essentially is remedial in nature. Ruddock v. Burrowes, 243 Conn. 569, 575, 706 A.2d 967 (1998).

In this case, § 52-592 was not at issue. The defendants raised no statute of limitations defense in their initial answer, and the court denied their request for leave to amend, which sought to add a statute of limitations defense. The accidental failure of suit statute applies only to actions barred by an otherwise applicable statute of limitations. See Bocchino v. Nationwide Mutual Fire Ins. Co., 246 Conn. 378, 382, 716 A.2d 883 (1998).

Our Supreme Court rejected an identical claim in Ross Realty Corp. v. Surkis, 163 Conn. 388, 311 A.2d 74 (1972). “While it has been suggested that it might be desirable for the plaintiff to plead sufficient facts necessary to bring the matter within the purview of § 52-592 . . . [our Supreme Court] has never held this to be a requirement. ... It has been and is the holding of [our Supreme Court] that matters in avoidance of the Statute of Limitations need not be pleaded in the complaint but only in response to such a defense properly raised.” (Citation omitted.) Id., 392. For that reason, the defendants’ cross appeal must fail.

On the plaintiffs appeal, the judgment is reversed only as to the denial of late charges and the case is remanded for further proceedings consistent with this opinion and to set a new law day. On the defendants’ cross appeal, the judgment is affirmed.

In this opinion the other judges concurred.

       As the trial court’s memorandum of decision states, the relief sought at trial was to fix the amount of the debt, including interest, late payment and attorney’s fees, on the mortgage of the real property at issue.

       Felice Fiore and Ronald S. Cook also were named as defendants, but the action was withdrawn as against them following their respective bankruptcy filings. We therefore refer in this opinion to Philip Fiore, Sr., and Mattea Fiore as the defendants.

       We note that the court awarded the plaintiff $2389.53 in additional interest and $500 in additional attorney’s fees as well as $400 for the appraisal fee.

       See footnote 3.

       In his brief, the plaintiff acknowledges that attorney’s fees in equitable actions are discretionary with the court.

       General Statutes § 52-592 (a) provides in relevant part: “If any action, commenced within the time limited by law, has failed one or more times to be tried on its merits because of insufficient service or return of the writ due to unavoidable accident or the default or neglect of the officer to whom it was committed, or because the action has been dismissed for want of jurisdiction . . . the plaintiff . . . may commence a new action . . . .”

       Practice Book § 10-3 (a) provides in relevant part that “[w]hen any claim made in a complaint. . . is grounded on a statute, the statute shall be specifically identified by its number.” In Spears v. Garcia, 66 Conn. App. 669, 676, 785 A.2d 1181 (2001), aff'd, 263 Conn. 22, 818 A.2d 37 (2003), this court held that the failure to comply with 1he directive of Practice Book § 10-3 (a) will not necessarily bar recovery as long as the defendants are sufficiently apprised of the applicable statute during the course of the proceedings. It is uncontested that the defendants were so apprised in this case.

       We note that the defendants did not appeal from that denial.