Burns v. Adler
155 A.3d 1223
| Conn. | 2017Background
- Contractor James E. Burns, Jr. performed a large renovation for homeowner David Y. Adler under a time-and-materials arrangement; disputes arose over unpaid sums after Adler made a final payment on August 4, 2008.
- Burns’s written contract failed to comply with statutory requirements of the Home Improvement Act (Conn. Gen. Stat. § 20-429 (Rev. to 2007)); Adler invoked the Act to repudiate payment and avoid further liability.
- The trial court found Adler acted in bad faith: after receiving most benefits, he deliberately refused further payments while inducing Burns to finish work, knowing Burns faced financial pressure from unpaid subcontractors and suppliers. The court awarded Burns restitution under the bad faith exception to § 20-429(a).
- Appellate Court affirmed the trial court’s bad-faith-based restitution and denied contractor’s claim for attorney’s fees under Conn. Gen. Stat. § 52-249(a); two certified appeals followed to the Connecticut Supreme Court.
- Justice Robinson (dissent) argues the majority wrongly reversed the Appellate Court on bad faith; he contends Habetz’s bad-faith exception is broad, fact-dependent, and properly applied here given the trial court’s findings.
Issues
| Issue | Plaintiff's Argument (Burns) | Defendant's Argument (Adler) | Held |
|---|---|---|---|
| Whether homeowner’s conduct fell within the Habetz bad-faith exception to § 20-429(a) | Burns: Adler acted in bad faith by receiving benefits then refusing payment and invoking the Act to avoid liability | Adler: Any refusal to pay was a good-faith dispute prompted by contractor’s statutory noncompliance and disorganized billing; no dishonest motive | Appellate Court (per dissent): Trial court’s factual findings support bad faith; bad-faith exception not limited to knowing use of a statutory "escape hatch" |
| Scope of bad-faith exception — limited to pre-formation intent or broader equitable estoppel? | Burns: Exception applies broadly to misconduct during contractual relationship, not only to knowing use of statute as an "escape hatch" | Adler: Exception requires homeowner knew of defective contract and intended to exploit it to avoid payment (per Wadia) | Appellate Court (per dissent): Exception is fact-dependent and may cover a wide range of dishonest conduct beyond formation/acceptance knowledge |
| Standard of review for bad-faith findings | Burns: Bad-faith is factual; appellate review should be for clear error regarding trial court’s finding | Adler: Issues include legal definition/application subject to plenary review | Dissent: Finding of bad faith is factual and reviewed for clear error; trial court’s credibility findings entitled to deference |
| Whether § 52-249(a) permits attorney’s fees when foreclosure judgment is entered by stipulation rather than after a hearing | Burns: Stipulation resolving foreclosure should be treated as the required hearing; awarding fees on substance-over-form basis | Adler: Statute requires an on-the-record hearing setting form of judgment/redemption time; stipulation does not satisfy the statutory condition | Held (dissent agreeing with Appellate Court): Strict reading of § 52-249(a) requires a hearing; stipulation in lieu of hearing does not permit attorney’s fees under that statute |
Key Cases Cited
- Habetz v. Condon, 224 Conn. 231 (Conn. 1992) (recognizes equitable bad-faith exception allowing contractor restitution despite statutory noncompliance)
- Wadia Enters., Inc. v. Hirschfeld, 224 Conn. 240 (Conn. 1992) (discusses limits of bad-faith proof; summary judgment appropriate where no evidence of dishonest purpose)
- Barrett Builders v. Miller, 215 Conn. 316 (Conn. 1990) (contractor barred from restitution for failure to comply with Home Improvement Act absent exception)
- Walpole Woodworkers, Inc. v. Manning, 307 Conn. 582 (Conn. 2012) (applies bad-faith exception where homeowner arbitrarily refused payment after substantial completion)
- Renaissance Mgmt. Co. v. Conn. Hous. Fin. Auth., 281 Conn. 227 (Conn. 2007) (bad-faith determinations are factual and reviewed for clear error)
- Rizzo Pool Co. v. Del Grosso, 232 Conn. 666 (Conn. 1995) (limits of recovery under bad-faith exception when contractor had not substantially performed)
- Lucien v. McCormick Constr., LLC, 122 Conn. App. 295 (Conn. App. 2010) (Appellate Court refusal to find bad faith where homeowner’s agent participated in contract drafting)
- Kronberg Bros., Inc. v. Steele, 72 Conn. App. 53 (Conn. App. 2002) (considers pre- and post-contract conduct in bad-faith assessment)
- A. Secondino & Son, Inc. v. LoRicco, 19 Conn. App. 8 (Conn. App. 1989) (discusses availability of attorney’s fees under § 52-249(a) in foreclosure actions)
- Clem Martone Constr., LLC v. DePino, 145 Conn. App. 316 (Conn. App. 2013) (addresses scope of attorney’s fees recoverable under § 52-249(a) relative to underlying trial work)