160 Conn.App. 180
Conn. App. Ct.2015Background
- In April 2011 Peterson (buyer) and Monica McAndrew & David Chute (sellers) executed a real estate purchase agreement for 43 Rowayton Ave., Norwalk, for $2,550,000 with a $255,000 deposit. Schedule A described the lot by reference to map 591 (1924 mean high waterline).
- The shoreline had expanded by accretion since 1924; parties discussed waterfront features and Chute told Peterson the property included land to the current mean high waterline. The parties did not analyze the nature of title to the accreted land before signing.
- Defendants were willing to convey marketable title to the parcel described in Schedule A and to quitclaim their interest west of the 591 line; they could not convey marketable title to the accreted strip to the current mean high waterline.
- Plaintiff refused to close unless he received marketable title to the current mean high waterline; defendants treated buyer as in default, kept the deposit and resold the property for $2,525,000. Closing to buyer never occurred.
- Trial court initially found for defendants on plaintiff’s claims but on reconsideration awarded plaintiff $124,266 for unjust enrichment (reducing retained deposit) and awarded defendants $80,000 in attorney’s fees. On appeal the court reversed only as to unjust enrichment, holding the liquidated damages clause was enforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — extent of conveyance | Contract and parties’ pre-contract statements show intent to convey to current mean high waterline (waterfront); schedule A should not limit conveyance | Contract unambiguously describes property by Schedule A (map 591); sellers fulfilled obligation by being ready to convey Schedule A property | Affirmed for defendants — contract unambiguous; no breach for failing to convey beyond Schedule A |
| Unjust enrichment / enforceability of liquidated damages | Sellers unjustly enriched if they retain whole $255,000 deposit because actual damages were substantially less | Liquidated damages clause (10% of price) valid and presumptively enforceable; buyer must prove clause is invalid or damages substantially less | Reversed — trial court erred: liquidated damages clause enforceable; defendants entitled to retain full deposit |
| Mutual mistake / reformation | Both parties mistakenly believed Schedule A included accreted land to current mean high waterline; reform contract | No mutual mistake: Schedule A unambiguously described lot by map 591; parties did not share a mistaken understanding of title extent | Affirmed for defendants — no mutual mistake proved |
| Fraudulent / negligent / innocent misrepresentation (by Chute) | Chute represented he owned waterfront marketable title; plaintiff justifiably relied and was induced to sign | Statements concerned ownership in common parlance, not promise of marketable title; plaintiff failed to prove falsity or justifiable reliance | Affirmed for defendants — plaintiff failed to prove misrepresentation or justifiable reliance |
| CUTPA claim (by plaintiff against Chute) | Misrepresentations and retention of deposit amount to unfair/deceptive trade practice | Conduct did not meet CUTPA standards; underlying misrepresentation claim fails | Affirmed for defendants — CUTPA claim not proven |
| Contractual attorney’s fees award | Plaintiff: defendants not prevailing party; fee award improper | Defendants: contract authorizes fees to prevailing party; they prevailed on main contract defense and on appeal on liquidated damages | Affirmed for defendants — trial court did not abuse discretion in awarding fees and in setting $80,000 as reasonable amount |
Key Cases Cited
- Vines v. Orchard Hills, Inc., 181 Conn. 501 (Conn. 1980) (purchaser in nonwillful default may recover payments if seller sustained no or substantially less damages than liquidated amount)
- Norwalk Door Closer Co. v. Eagle Lock & Screw Co., 153 Conn. 681 (Conn. 1966) (liquidated-damages clause unenforceable where nonbreaching party suffered no damages)
- Litton Indus. Credit Corp. v. Catanuto, 175 Conn. 69 (Conn. 1978) (where liquidated damages clause valid, agreed amount governs over proof of actual damages)
- American Car Rental, Inc. v. Commissioner of Consumer Protection, 273 Conn. 296 (Conn. 2005) (tests for enforceability of liquidated damages clauses)
- Roche v. Fairfield, 186 Conn. 490 (Conn. 1982) (accretion doctrine: accreted land becomes part of waterfront owner's title)
- Weiss v. Smulders, 313 Conn. 227 (Conn. 2014) (parol evidence rule and contract integration principles)