New Milford v. Standard Demolition Services, Inc.New Milford v. Standard Demolition Services, Inc.
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Syllabus
The plaintiff town sought to recover damages from the defendant contractor for breach of contract. The plaintiff owned a vacant brass mill factory that was contaminated with, inter alia, polychlorinated biphenyls (PCBs). The plaintiff, on the advice of consultants, applied to the United States Environmental Protection Agency (EPA) for permission to demolish and clean up the property and engage contractors to perform the work. The plaintiff issued a notice inviting prospective contractors to provide bids for the third phase of the project, which involved the demolition, abatement and remediation of the property. The notice indicated that the contractor would be allowed to keep the scrap value of any structural steel salvaged from the site. The plaintiff made all public information about the project available to prospective bidders, including a report from one of its consultants that referenced the presence of PCBs throughout the building. The plaintiff also provided a letter to all prospective bidders clarifying that the selected contractor would be responsible for the sampling and disposal of any PCB contaminated material. The defendant submitted the winning bid for the contract, in which it did not allocate any funds for the remediation or disposal of any contaminated structural steel on the site, as it believed that the steel was not contaminated and could be recycled without remediation. Once selected, the defendant executed a certification acknowledging that it had read and agreed to abide by all conditions set forth in the EPA‘s approval letter for the third phase of the project, which included attachments regarding the cleanup of PCB contaminated material and correspondence between the EPA and the plaintiff regarding the PCB contamination of various materials, including steel beams. The parties then entered into a contract for the phase three work, which expressly incorporated the EPA approval letter and established a 140 day deadline for the defendant to complete the job. Two months after the plaintiff had issued the defendant a notice to proceed, the defendant still had not obtained EPA approval of its contractor work plan, which was required before it could begin any substantial demolition work, and it had become engaged in a dispute with the plaintiff regarding the testing and disposal of the structural steel on the property. The defendant contended that the plaintiff mischaracterized the steel, leading it to believe that the steel was not contaminated and could be disposed of without remediation. The defendant claimed that it remained ready, able and willing to perform the work on the project, but it refused to do so if it was required to sample the steel to determine whether it was contaminated and told the plaintiff that it had accidentally executed the contract, as it had submitted its bid without information regarding the contamination of the steel or knowledge that the disposal of any contaminated steel would be its responsibility. Thereafter, the plaintiff sent a letter to the defendant, notifying the defendant that it was in default because, inter alia, it would not be able to timely complete its work under the contract and had anticipatorily breached various provisions of the contract, and, consequently, its employment was terminated. The plaintiff rebid the project and hired C Co. to complete the work on the site, including the testing and disposal of the structural steel. C Co. was unable to finish its work, however, due in part to the increased expense and time required to finish the project as a result of the defendant‘s intervention, which led to additional testing requirements imposed by both the EPA and the trial court. The trial court found that the plaintiff had established its claim for breach of contract and had suffered damages, limited to the liquidated damages provision of the contract, in an amount equal to 254 days, less the retainage held by the plaintiff. The defendant appealed, and the plaintiff cross-appealed, claiming that the trial court erred in its award of damages. Held:
- The defendant‘s claim that the trial court misapplied state and federal environmental laws was belied by the trial court‘s findings, which were supported by the record: the defendant did not raise before the trial court, nor did the trial court address, the defendant‘s claims that the plaintiff lacked proper authorization from the EPA to work on the undisclosed waste at the site or that the plaintiff and the trial court disregarded certain statutory (
§ 22a-467 ) requirements relating to the disposal of PCB contaminated material, and, accordingly, this court declined to address those claims; moreover, the defendant‘s claims that the plaintiff failed to adequately characterize the site and that the plaintiff was required under the contract to paint chip test the steel beams prior to the defendant performing any work at the site lacked merit, as the trial court found that the contract did not require paint chip testing, that the testimony of the plaintiff‘s expert witnesses that paint chip sampling under such circumstances was not customary was credible, that there was no express statement in the contract that the steel was not contaminated, that the plaintiff performed its obligations under the contract, and that the contract overwhelmingly placed the obligation for the testing, handling and processing of the material on the site on the defendant and expressly made clear that the risk of the condition of the materials being different than anticipated was solely on the defendant, and such findings were supported by the clear and unambiguous provisions of the contract and the documents related thereto; furthermore, this action involved a breach of contract claim, and the defendant failed to provide a clear explanation as to how its claims concerning the EPA regulations circumvented the trial court‘s findings regarding the contract and failed to raise at trial its claims that the plaintiff‘s conduct constituted a violation of the EPA regulations and that the trial court erred in failing to find such a violation; additionally, although the defendant may have made its bid and entered the contract on the basis of a mistaken basic assumption, neither the trial court nor this court was permitted to rewrite the contract or to relieve the defendant of its obligations thereunder, as the defendant was a sophisticated and experienced party with respect to the type of work covered by the contract, it had the opportunity to address any issues it had with the proposed terms and interpretation of the contract prior to its execution, and the circumstances of the contract formation were not unconscionable. - This court declined to review the defendant‘s claim that the trial court erred in finding that the contract was not impossible to perform: because the defendant failed to plead impossibility as a special defense, such issue was not properly before the trial court, which, accordingly, did not undertake the necessary analysis of such claim nor did it make any findings thereon, and, as a result, the trial court could not have erred in failing to find that the defendant‘s performance under the contract was impossible; moreover, it was incumbent on the defendant to seek an articulation of the trial court‘s decision as to its failure to make a finding on a claim that the defendant alleged was properly before the trial court, and, in the absence of such an articulation, the record was inadequate for this court to review the claim.
- The defendant‘s challenge to the trial court‘s implicit determination that the plaintiff lawfully had terminated the contract was unavailing: the defendant‘s claim was premised on a faulty assumption, namely, that the plaintiff was in default under the contract, because the trial court expressly found that the plaintiff had performed its obligations under the contract and that there was ample evidence of the defendant‘s breach of its obligations under the contract, which findings were supported by the record.
- The defendant‘s claim that the change orders granted to C Co. in connection with additional paint chip testing requirements imposed by the EPA—which were not a part of the defendant‘s contract with the plaintiff—constituted an admission by the plaintiff that its contract with the defendant could not have been performed without such testing was contrary to the record and unavailing: the defendant‘s argument failed to acknowledge the basis for the change orders sought by C Co., namely, that the trial court found that the plaintiff was not required to conduct paint chip sampling under the contract with the defendant because the EPA did not require such testing until after the plaintiff had terminated that contract, as the requirement was instituted as a result of the defendant‘s unilaterally contacting the EPA with respect to the paint chip sampling it had conducted on the site as part of this litigation; moreover, such finding was supported by the record and was not clearly erroneous.
- Although the amount of the trial court‘s award of liquidated damages was proper, that court erroneously failed to determine whether the plaintiff proved that it had suffered any compensable actual or consequential nondelay damages:
- The trial court improperly determined that liquidated damages were the plaintiff‘s exclusive remedy under the contract: the language in the liquidated damages provision clearly applied to damages resulting from delay, there was no language in the contract expressly stating that such damages were the plaintiff‘s exclusive remedy for a breach unrelated to the defendant‘s delay in performance, and to interpret liquidated damages as the plaintiff‘s sole remedy would render the contract‘s damages and losses provision superfluous; accordingly, the trial court erroneously failed to determine whether the plaintiff proved that it had suffered any compensable actual or consequential nondelay damages and, if so, the amount of such damages, and, as a result, the case was remanded to the trial court for a new hearing in damages.
- The trial court did not err in limiting the award of liquidated damages to 254 days: the plaintiff‘s claim on appeal that liquidated damages instead should have run through the date of the trial court‘s decision failed, as the plaintiff did not make such a request at trial and the premise of such claim no longer existed because it was based on the trial court‘s determination that liquidated damages were the plaintiff‘s exclusive remedy under the contract, which this court concluded was made in error.
Argued November 30, 2021—officially released April 26, 2022
Procedural History
Action to recover damages for breach of contract, and for other relief, brought to the Superior Court in the judicial district of Litchfield, where the defendant filed a counterclaim; thereafter, the matter was tried to the court, Shaban, J.; judgment for the plaintiff on the complaint and on the counterclaim, from which the defendant appealed and the plaintiff cross appealed to this court. Reversed in part; further proceedings.
Raymond A. Garcia, with whom were Nyle K. Davey, and, on the brief, Lauren Lyngholm Crowe and Jonathan A. Krumeich, for the appellant-cross appellee (defendant).
John D. Tower, with whom was Graham W. Moller, for the appellee-cross appellant (plaintiff).
Opinion
At the trial of this matter, which spanned over twenty-two days, the parties testified, presented lay and expert witnesses, and submitted 273 documents into evidence. In a comprehensive memorandum of decision, the court, Shaban, J., found the following facts: “The plaintiff is the owner of an industrial property located at 12 Scovill Street in New Milford, which it acquired through a tax foreclosure in 1999. The property consists of fifty-three acres [and] includes an approximately 315,000 square foot vacant brass mill factory contaminated with polychlorinated biphenyls (PCBs) and asbestos containing materials . . . . The plaintiff renamed the site the ‘Century Enterprise Center’ and hired consultants to help evaluate the environmental hazards on the site. Under the guidance of the consultants, the plaintiff made decisions about how it would apply to the United States Environmental Protection Agency (EPA) for permission to demolish and clean up the property and engage contractors to perform the work.
“Prior to its involvement with the defendant, the plaintiff had already completed two phases of the work in its effort to clean up the property. In phases I and II of the project, the plaintiff‘s consultants, Tighe & Bond, had characterized the structural steel on the site as ‘non-porous.’ The EPA approved the work proposed by the plaintiff through its consultants for phases I and II and it was completed. For phase III of the project, the demolition, abatement, and remediation work, the plaintiff hired TRC Environmental Corporation (TRC) as its consultant and project manager. In performing its evaluation of the site, TRC reviewed and relied on the findings of the prior consultants from the phase I and II portions of the project. During the earlier phases, there had been extensive communication between the prior consultants and the EPA about the project. TRC found that the work had been allowed to proceed as proposed and that wipe sampling of ‘porous’ surfaces had been done. In 2015, after TRC set the
“Thereafter, the plaintiff issued a Notice to Bidders [notice] inviting prospective contractors to provide bids for the demolition, abatement, and remediation of the property based on the proposed plan developed by TRC. . . . Bid packages were made available to all of the prospective bidders as part of the notice, which included the proposed contract documents.2 The documents were also available through an on-line website. The notice recited that additional documents were available for review in a public reading room at the New Milford Public Works facility. Electronic thumb drives were also made available that included all historical records, plans, drawings, studies, and other relevant information from phases I and II. . . . The bid forms provided to the prospective contractors included a line item for the scrap value of the structural steel [that] the contractor would be allowed to keep. All of the public information in the plaintiff‘s possession regarding all three phases of the project, including correspondence with the EPA, was made available to prospective bidders for inspection and review. This included a facility investigation document prepared by Tighe & Bond that referenced the presence of PCBs throughout the building‘s interior that had likely been spread through dust. . . . This also included an engineering evaluation/cost analysis relative to the interior of the building. . . . On May 26, 2015, a mandatory prebid meeting was held by the plaintiff with the prospective bidders. . . . Following that meeting, on June 2, 2015, the plaintiff held an open house and walk-through at the site for all prospective bidders. . . . The defendant attended the open house and physically viewed the site. Both prior to and following the meeting and open house, and prior to the submission of its bid, the defendant submitted to the plaintiff multiple requests for information about the project to which the plaintiff responded. . . .
“In addition, the plaintiff invited all potential bidders to submit in writing any questions they may have had about the project. By letter of June 12, 2015, the plaintiff provided all potential bidders with the responses to a list of those questions that had been submitted as of June 10, 2015, in a document described as ‘Clarification No. 1.’ . . . Several questions dealt with the sampling and disposal of PCB contaminated materials. The funda- mental response to each of these questions was that the contractor selected for the project would be responsible for the sampling and disposal of all such materials. The plaintiff conveyed that its only obligation was to do verification sampling of items left on-site after the job was completed. . . .
“On June 15, 2015, following completion of its inquiries and review of the bid specifications, the defendant submitted its bid in the amount of $2,713,950 on the forms supplied by the plaintiff, which included Clarifications Nos. 1 and 2 as addenda. . . . The defendant‘s bid did not provide for the remediation, abatement, and disposal of
“By letter of July 16, 2015, the plaintiff notified the defendant that it was the successful bidder. . . . On September 1, 2015, the EPA issued a five page approval letter authorizing the plaintiff to move forward with phase III of the project subject to the conditions set forth in the letter. . . . At the time of its bid, the defendant was aware that the EPA could impose additional conditions on the work to be done beyond those set forth in the proposed contract. Paragraph 13 of the approval letter provides: ‘The PCB cleanup standard for porous surfaces (i.e., concrete) and soil shall be less than or equal to . . . 1 part per million (“ppm“) for unrestricted use or disposal. The PCB cleanup standard for non-porous surfaces (e.g., overhead cranes, steel beams) shall be less than . . . 10 μ/100 cm for unrestricted disposal and/or recycling. (a) PCB contaminated wastes shall be removed and disposed of as detailed in the [attached Administrative Record], except as follows . . . (ii) Steel beams shall be disposed of as a [greater than or equal to] 50 ppm PCB waste or alternatively shall be sampled to determine PCB disposal requirements [and] (iii) If samples are collected, sampling analytical results and proposed waste disposal details shall be submitted to [the] EPA for review prior to removal of these wastes from the [s]ite.’ . . . The EPA‘s definition of the steel beams as non-porous was consistent with the definition that had been given by Tighe & Bond in phase II of the project. . . .
“The EPA‘s letter was accompanied by two attachments, the first of which set forth the ‘PCB Cleanup and Disposal Approval Conditions,’ and the second of which was identified as the ‘Administrative Record (Notification).’3 . . . Paragraph 11 (a) [of attachment one] required the plaintiff to provide to the EPA ‘a certification signed by its selected abatement/demolition contractor [the defendant], stating that the contractor(s) has read and understands the Notification, and agrees to abide by the conditions specified in this [a]pproval . . . .’
“Attachment [two] consists of a series of documents and correspondence reviewed by the EPA prior to the issuance of its approval . . . [some of which included] discussions of PCB contamination of various materials including overhead cranes and steel beams. Also, § 5.8 of the phase I PCB Source Removal Notification dated December, 2004, prepared by Tighe & Bond references PCB wipe sample test results for nonporous materials such as building interior walls and beams. . . .
“In its September 1, 2015 approval letter, the EPA noted that ‘[a]ttachment [two] provides a list of supporting information for the [p]hase III project . . . which [the] EPA considered for this [a]pproval. All submittals in their entirety are considered “the Notification.“’ . . . The next day, September 2, 2015, the plaintiff forwarded by e-mail a copy of the approval letter to the defendant. . . . That e-mail had appended to it all of the materials making up the attachments to the approval letter. In the e-mail, Michael Zarba . . . the public works director for the plaintiff, asked that the defendant review the materials and let him know as soon as possible if there were any questions. . . . In response, the defendant sent by e-mail a letter dated September 3, 2015, which was the certification relative to the ‘Notification’ that was required by the approval letter. . . . The letter expressly states that ‘[the defendant] has read and understands the ”
“Following receipt of the certification letter and the execution of the contract, the plaintiff issued to the defendant a letter dated September 14, 2015, which constituted a ‘Notice to Proceed’ as required by the terms of the contract. . . . That notice directed the defendant to commence work on the project and reminded the defendant that pursuant to the terms of the contract it had 140 calendar days to complete the job, thereby creating a deadline of February 1, 2016. Thereafter, the defendant commenced work on the project, including the preparation and submission of certain documents to TRC for its review and approval as the plaintiff‘s project manager. More specifically, the defendant was required to submit a contractor work plan (CWP) for the PCB remediation to be done by the defen- dant on the job site. The CWP, subject to the approval of TRC, was in turn to be submitted to the EPA for its review and approval. The first CWP, dated September 24, 2015, was submitted to the plaintiff on September 29, 2015, and was based in part on TRC‘s own Modified Self-Implementing Phase III Remediation Plan dated January, 2015. . . . The first CWP . . . was reviewed by TRC and found [to be] insufficient in various ways. The comments of TRC were forwarded to the defendant on October 2, 2015, by e-mail and specifically referenced that the CWP should ‘[i]nclude a discussion of steel beam sampling and disposal means and methods per [paragraph] 13 (a) (ii) of [the] EPA‘s approval letter’ and ‘[i]nclude a statement that sampling analytical results will be submitted to [the] EPA for review prior to disposal per [paragraph] 13 (a) (iii) of [the] EPA‘s approval letter.’ . . . With respect to § 2.4 of the proposed plan regarding remediation of overhead cranes, TRC commented that ‘[t]he EPA‘s approval states that the beams must be handled and disposed of as a [greater than or equal to] 50 ppm PCB waste or will be sampled to determine disposal requirements.’ Following the receipt of TRC‘s comments, the defendant hired an independent consultant with expertise in the handling of PCBs and submitted the plan and TRC‘s comments to him for his review. . . .
“The defendant was also required to submit to TRC for its review and approval, a health and safety plan . . . as well as a demolition work plan. TRC reviewed the [health and safety plan], found it lacking and provided comments thereon to the defendant. As of October 19, 2015, TRC had not received a response to those comments. . . . TRC insisted that the [health and safety plan] and other plans had to be approved before substantive physical work on the project could begin despite the defendant‘s belief that it was for review purposes only. . . .
“While attempting to work this out, the parties continued to work toward an acceptable CWP. Following the review of the original CWP by the defendant‘s consultant for approximately one month, a second CWP was submitted to TRC on November 6, 2015 . . . . In the second CWP, the defendant proposed that, as part of its operations, it would conduct wipe sampling of the steel columns for PCB characterizations to determine whether the structural steel could be disposed of consistent with
“Based on the comments of TRC, the defendant submitted a third proposed CWP on November 13, 2015 . . . which deleted the paint chip sampling language. . . . On November 18, 2015, following some additional edits requested by TRC, the defendant submitted its fourth proposed CWP . . . . TRC recommended to the plaintiff that it be submitted to the EPA for approval. . . . That recommendation was based on TRC‘s contractual authority to review and approve such plans. The plan called for the defendant to conduct wipe sampling of the steel columns. . . . It expressly recited that ‘[i]n accordance with the EPA [a]pproval [l]etter, the steel within the building is assumed to contain PCB concentrations [greater than] 50 ppm in surface contamination caused by previous transformer remediation and/or historic site activities. Wipe sampling will be conducted in order to prove that the structural elements can be recycled without restriction. . . . Steel found to contain PCB above the remedial goal will be decontaminated again in accordance with [40] C.F.R. [§] 761.79 and/or will be disposed of as PCB remediation waste.’ . . . The plan was submitted to the EPA on November 18, 2015. The plan, however, was not approved because the EPA responded with comments and questions it wanted addressed. This included questions about the possible wipe sampling of cranes and steel beams and testing of the expansion joint caulking. . . . The EPA did not suggest or ask for paint chip sampling. In light of the comments and questions, on December 10, 2015, the parties agreed that they would hold off on resubmitting a CWP or doing further work until after TRC had done testing of the expansion joint caulking to determine if there was PCB contamination and, if so, how it should be treated for purposes of disposal. . . . The additional testing took six days and was done by the plaintiff.
“By letter dated December 15, 2015, the defendant issued a formal notice of delay to the plaintiff claiming the project had been delayed by ninety-four days due to the actions of the plaintiff. . . . Among other things, the formal notice cited the plaintiff‘s failure to ‘initially characterize and remove potentially PCB contaminated paints and dust on the steel beams and expansion joint material in the concrete.’ . . . The defendant also submitted with the letter a new work schedule indicating a completion date of on or about May 4, 2016. On December 16, 2015, TRC directed the defendant to ‘continue with [the] EPA work plan preparation and submit for review by TRC using your planned method for expansion joint removal. Disposal considerations will be addressed later.’ . . . On December 22, 2015, the defendant responded that it would like any test results forwarded to it as it was likely that the EPA would require the information in the CWP. . . .
“Under the terms of the contract . . . any ‘[s]teel for salvage shall become the property of the Contractor. . . . The risk for quantity and value of scrap shall be the Contractor[‘s]’ . . . . Line 8 of the bid form also stated that the ‘[q]uantity and value of scrap above and below the Lump Sum bid is at Contractor[‘s] . . . sole risk/reward.’ . . . In bidding the project on the presumption the steel was not contaminated, the defendant had not allocated any costs associated with the disposal of contaminated steel. The defendant took the position that, under the contract, the steel was to be tested for PCBs and that it was the responsibility of the plaintiff to do so. The defendant further contended that the failure to properly characterize the steel resulted in its inability to recycle it in such a way that it would be able to obtain a financial credit of at least $200,000 as anticipated by the bid and contract for an estimated 1000 tons of steel at $200 per ton.
“This issue over who was to do the PCB sampling of the structural steel and the subsequent disposal was discussed as early as September 22, 2015, during the weekly job meeting. At that meeting, TRC made reference to paragraph 13 (a) (ii) of the EPA approval letter and advised the defendant that it was [the defendant‘s] responsibility as the project contractor to do the sampling of the steel. This is also evidenced, in part, by the weekly meeting minutes, which note that the defendant claimed several of the EPA requirements specified in the EPA approval letter were the basis for a change in the contract. . . . In response, TRC indicated to the defendant on each occasion that if it was seeking a change in the contract it should formally submit a written request in accordance with its terms. . . . Eventually, on November 27, 2015, the defendant submitted a written notice to the plaintiff seeking a change to the contract based on a ‘discovery of undocumented conditions,’ which were described as follows: ‘The structural steel of the building has not been characterized to the satisfaction of the EPA. This characterization sampling is not included as our work in the specification.’ . . . This notice was followed by a November 30, 2015 letter from the defendant directly to
“The plaintiff responded by letter dated December 9, 2015, effectively rejecting the defendant‘s claims and reminding it that time was of the essence relative to the completion date under the terms of the contract. . . . The defendant responded on December 15, 2015, noting that, because the plaintiff ‘failed to initially characterize and remove potentially PCB contaminated paints and dusts on the steel beams and expansion joint material in the concrete,’ it was unable to complete the CWP, which was needed in order to allow the start of demolition activities. . . . The defendant claimed that, as a result of the plaintiff‘s failures, it was entitled to a compensable delay of ninety-four days in the completion of the contract. . . . Thereafter, the plaintiff issued a letter dated January 4, 2016, notifying the defendant that it was in default and was therefore terminated from its employment under the contract, effective January 11, 2016. . . . As of the date of the letter, the defendant had yet to provide to the plaintiff a revised CWP, an acceptable [health and safety plan], or a demolition work plan. The basis for the termination letter was that the defendant would not be able to timely complete the work, it failed or refused to comply with pertinent laws, ordinances or the instructions of the engineer (TRC), violated or anticipatorily breached various provisions of the contract, and failed to press the work to completion. Further, [the defendant having contended] in its November 30, 2015 letter that [it] had ‘accidently executed’ the contract, the plaintiff considered the defendant to have renounced and anticipatorily breached the contract. There was credible testimony from both parties that no substantive work was done on the project thereafter. Based on the defendant‘s own payment application for work done through November 30, 2015, only 9.51 percent of the work on the project had been done. . . . As of January 11, 2016, including the six day contract extension provided by the plaintiff to the defendant, 82 percent of the time allowed for the completion of the work had passed (119 of the 146 days). Shortly thereafter, on January 15, 2016, the plaintiff filed the present complaint against the defendant.
“While pursuing its complaint, the plaintiff undertook the effort to complete the project by putting out to bid what it saw as the remaining work to be done. . . . Following a procedure similar to that of the original bid, including the contractor‘s bid meeting, on-site visit, and the provision of documents for review and question clarifications, a total of nine contractors submitted bids on the project. [The March 31, 2016 bid of] Costello Dismantling [Company, Inc.] (Costello) . . . of $2,962,207 was
“Costello‘s work on the project was interrupted when the defendant directly contacted the EPA by e-mail dated September 1, 2016, to provide it with information about paint sampling that was to be done on the site pursuant to an August [19], 2016 order of this court in this action.5 . . . This e-mail was sent approximately eight months after the defendant had been dismissed from the job. What followed was a series of e-mails and phone calls between the defendant and the EPA through November 21, 2016. This correspondence included reports and findings from the defendant‘s consultant and trial expert, John Insall of Partner Engineering, regarding the paint sampling and the results thereof, which showed that some of the samples contained PCBs in excess of 50 ppm. . . .
“During this time, Costello continued other work on the project, providing CWPs and revisions of the plans based on the review and comments of both TRC and the EPA. As part of the plans, Costello, which operated with the understanding that it had the contractual responsibility for the sampling of PCBs on the steel beams and other surfaces, submitted to TRC for its approval a PCB sampling plan dated August 17, 2016, prepared by its consultant, Strategic Environmental Services, Inc. . . . That plan noted that previous investigations had reported PCB concentrations
“While the litigation continued, Costello still attempted to do certain work on the property. During the course of its work on the project, Costello submitted eleven change order requests. Most, but not all, were approved by TRC. . . . By September 21, 2017, nearly a year after the EPA first approved Costello‘s CWP, the EPA approved the plaintiff‘s plan for decontamination and recycling of the structural steel. . . . The approval was consistent with the original September 1, 2015 approval letter subject to certain additional conditions such as the additional testing of steel beams and other materials, which were the result, in part, of the court-ordered paint chip sample results that the defendant unilaterally provided to the EPA on November 21, 2016. It also required the plaintiff to provide to the EPA and the Connecticut Department of Energy and Environmental Protection [department] the paint chip and wipe sample results of any waste to be shipped off-site. This was, in effect, the requirement to do verification sampling, which the plaintiff was already obligated to do under the terms of the contract[s] with both the defendant and Costello. Such conditions were within the discretion of the EPA to add and required the plaintiff, where paint chip samples revealed the presence of PCBs [greater than or equal to] 50 ppm, to decontaminate or dispose of the steel in accordance with paragraph 13 (a) (ii) and (iii) of the original approval letter. In effect, the EPA required the plaintiff to do nothing more than what it was originally required to do relative to the disposal of the steel. The letter was not amended or modified relative to the characterization and treatment of the steel beams, nor were any other of its terms or provisions changed in that regard. As worded, the original approval letter did not specifically detail the frequency of sampling or preclude the decontamination of the steel to bring the PCBs down to a level where the steel could be recycled. . . .
“Having done wipe sampling of the structural steel as part of its work, Costello found some beams were beyond acceptable contamination standards. Following completion of the sampling, Costello then began decontamination of those beams through a pilot decontamination program, which proved very successful. The decontamination process, however, was stopped due to this pending litigation, which had prompted the EPA to seek the additional testing. . . . To that point there only remained a few contaminated items. Mike Costello credibly testified, as a disclosed expert, that had Costello been able to complete the decontamination process, there was a disposal facility that would have accepted the steel for recycling. Also, as part of the scope of its work, Costello was to take down the roof of the building, which it had done sometime in the fall of 2016. . . . Because of the defendant‘s correspondence
In its complaint, the plaintiff alleged a single count of breach of contract by the defendant. Specifically, the plaintiff alleged that, via a letter dated January 4, 2016, it had declared the defendant to be in default of the contract and had given the defendant seven days’ notice that the defendant‘s employment under the contract was terminated. The complaint further alleged that the defendant breached the parties’ contract in one or more of the ways set forth in the January 4, 2016 termination letter, which stated that the defendant (1) had failed to complete its work under the contract in a timely manner; (2) had failed or refused to comply with pertinent laws, regulations and instructions of the engineer for the project; (3) anticipatorily breached material provisions of the contract; and (4) did not vigorously perform its obligations as required by article 2.1.2 of the contract.
In response, the defendant filed an answer and nine special defenses. The nine special defenses alleged that the plaintiff‘s action was barred, in whole or in part, by the following: (1) the failure of the complaint to state a claim for which relief could be granted; (2) unilateral mistake in the terms of the contract; (3) fraud in the inducement; (4) equitable estoppel; (5) unclean hands; (6) waiver; (7) a failure to mitigate damages; (8) a material breach of the contract by the plaintiff; and (9) the plaintiff‘s failure to comply with the conditions for termination of the contract. The defendant also filed a fourth amended, eight count counterclaim alleging, in count one, breach of contract for failure to pay; in count two, breach of contract for the plaintiff‘s delays in the performance of its work under the contract; in count three, wrongful termination; in count four, negligent misrepresentation; in count five, a violation of
Next, the court addressed the retainage8 held by the plaintiff. Pursuant to
THE DEFENDANT‘S APPEAL
On appeal, the defendant claims that (1) the court misapplied state and federal environmental regulations, (2) the court erred in not finding that the contract was impossible to perform, (3) the court improperly determined that the plaintiff lawfully had terminated the contract, and (4) evidence of certain change orders executed by the plaintiff in connection with its contract with Costello, pursuant to which the plaintiff had agreed to modify terms of that contract, constituted admissions that the plaintiff‘s contract with the defendant was defective and could not be performed by the defendant as written.
Before we address the defendant‘s claims, we first set forth our well established standard of review in cases involving the issue of contract interpretation.9
“The elements of a breach of contract claim are the formation of an agreement, performance by one party, breach of the agreement by the other party, and damages. . . . The interpretation of definitive contract language is a question of law over which our review is plenary. . . . By contrast, the trial court‘s factual findings as to whether and by whom a contract has been breached are subject to the clearly erroneous10 standard of review and, if supported by evidence in the record, are not to be disturbed on appeal.” (Citations omitted; footnote added; internal quotation marks omitted.) CCT Communications, Inc. v. Zone Telecom, Inc., 327 Conn. 114, 133, 172 A.3d 1228 (2017). “[T]he intent of the parties [to a contract] is to be ascertained by a fair and reasonable construction of the written words and the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract. . . . Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity . . . . Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party‘s subjective perception of the terms. . . . [T]he mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous. . . . If a contract is
Moreover, “[c]ourts do not unmake bargains unwisely made. Absent other infirmities, bargains moved on calculated considerations, and whether provident or improvident, are entitled nevertheless to sanctions of the law. . . . Although parties might prefer to have the court decide the plain effect of their contract contrary to the agreement, it is not within its power to make a new and different agreement . . . .” (Internal quotation marks omitted.) Detar v. Coast Venture XXVX, Inc., 74 Conn. App. 319, 323, 811 A.2d 273 (2002). “It also is settled that [t]he individual clauses of a contract . . . cannot be construed by taking them out of context and giving them an interpretation apart from the contract of which they are a part. . . . A contract should be construed so as to give full meaning and effect to all of its provisions . . . .” (Internal quotation marks omitted.) FCM Group, Inc. v. Miller, 300 Conn. 774, 811, 17 A.3d 40 (2011).
A
The defendant‘s first claim is that the court misapplied state and federal environmental laws. Specifically, the defendant focuses on the court‘s statement, which it characterizes as erroneous, that, “[a]t the heart of the dispute between the parties is whether the plaintiff was obligated to do sampling of the structural steel for PCBs under the terms of the contract, of which the September 1, 2015 EPA approval letter was a part.” The defendant claims, instead, that its dispute with the plaintiff “was about the obligation to characterize the waste coming off the site based on the EPA regulations and state law, not the contract.” The defendant further claims that the court, by focusing on the contract, “misapplied the state and federal regulatory scheme as it pertains to cleanup projects affecting regulated PCB contamination,” and that, by “focusing on the steel, it disregarded the other PCB contaminated waste revealed by the EPA imposed testing, the requirements of
For example, the defendant asserts that the notification provided by the plaintiff to the regulators was inadequate and did not comply with
The defendant‘s claims are based on its assertion that “[t]he state and federal environmental regulatory schemes both articulate a stringent policy preventing the disturbance of PCB contaminated waste unless and until the nature and extent of the contamination is determined and disclosed to the regulators, and they approve the plan for remediation and disposal of regulated waste.” In support of this proposition, the defendant cites to
The defendant‘s claims of violations by the plaintiff of state and federal statutes and regulations can be distilled to one central claim, namely, that the plaintiff, prior to entering into the contract with the defendant, should have tested and analyzed samples of all of the waste at the site in order to be able to characterize the site adequately. As a result of the plaintiff‘s failure to do so, the defendant alleges that the information provided to the EPA was “limited or false,” as it did not cover the undisclosed contaminated waste. Thus, according to the defendant, the Notification and approval letter from the EPA could not and did not provide authorization to perform work on the undisclosed waste, which precluded the defendant from performing any such work until the plaintiff performed the necessary testing and the EPA provided the necessary authorization. We disagree and conclude that the defendant‘s claims are belied by the court‘s findings, which are supported by the record.
1
First, from our review of the record, it does not appear that the defendant raised its claim before the court that the plaintiff lacked proper authorization from the EPA to perform work on the undisclosed waste at the site, as it was not mentioned in the defendant‘s posttrial brief nor did the court address it in its memorandum of decision. Rather, the defendant argued at trial that the plaintiff‘s mischaracterization of the steel made it impossible for the defendant to perform under the contract and that the plaintiff breached the contract by failing to characterize the steel properly. This court, therefore, will not address the issue of the adequacy of the EPA approval letter authorizing the plaintiff to commence work on phase III of the project, as that issue was not raised before or decided by the trial court. See Lebanon Historical Society, Inc. v. Attorney General, 209 Conn. App. 337, 351 n.12, 268 A.3d 734 (2021) (declining to review claim that was not distinctly raised before or decided by trial court). Moreover, because the court did not reference
2
The following facts are relevant to the defendant‘s claims that the plaintiff did not characterize the site adequately and was required under the contract to paint chip test the steel beams before the defendant could perform any work at the site. The plaintiff submitted a notification to the EPA seeking approval of a proposed plan to address the removal of PCB contaminated building materials from the project site. In response, on September 1, 2015, the EPA issued an approval letter authorizing the plaintiff to move forward with phase III of the project subject to the conditions set forth in the letter and two attachments. The first attachment required the plaintiff to provide to the EPA “a certification signed by its selected abatement/demolition contractor, stating that the contractor(s) has read and understands
As stated previously in this opinion, the court found that the parties’ dispute centered on whether the contract obligated the plaintiff to do paint chip sampling of the structural steel to determine the presence of PCBs at an improper level. In addressing this issue, the court found that the testimony of Goldblum, the defendant‘s president, and Lawrence Kurt, who prepared the CWP for the defendant, made “clear that the defendant‘s position was that paint chip sampling of the steel was necessary for it to be sold to scrap dealers as recyclable material.” The general truth of that statement, however, is irrelevant because the court found that the contract does not specify any requirement for paint chip testing, and our examination of the contract confirms that finding. Additionally, the court found the testimony of the plaintiff‘s expert witnesses “to be credible12 and of greater weight than that of the defendant‘s expert“; (footnote added); on the issue of whether it is customary to require paint chip sampling under circumstances similar to those in the present case.13 The court further found
We conclude that the court‘s findings are supported by the clear and unambiguous provisions of the contract. For example, the provision of the contract governing the transportation and disposal of hazardous materials requires that “[a]ll labor, materials, tools, equipment, services, testing, insurance, and incidentals which are necessary or required to perform the work in accordance with applicable governmental regulations, industry standards and codes, and these specifications, shall be provided by the Contractor.” (Emphasis added.) The contract further provides that “[a]ll characterization sampling and analysis for disposal shall be conducted by the CONTRACTOR, with supervision from the ENGINEER, where indicated,” and that “[t]he Contractor is responsible for verifying actual locations and quantities of the items with hazardous/regulated material/waste constituents and for their proper handling and disposal.” Moreover, neither the contract nor the approval letter required the plaintiff to do paint chip sampling. As the court properly found, the contract, when viewed as a whole, “overwhelmingly placed the obligation for the testing, handling and processing of the materials on the site upon the defendant.” Indeed, as the court observed, “[f]rom the broadest perspective, while the defendant argues that it was the plaintiff who was responsible for managing and disposing of the PCBs on the site, the very purpose of the plaintiff awarding the contract to the defendant was to have it do that very work,” and “[w]hat the defendant viewed as extra work with respect to the testing and treatment of the structural steel was reasonably within the scope of the work called for by the contract and the EPA approval letter.”
In the present case, the court correctly found that the contract “overwhelmingly placed the obligation for the testing, handling and processing of the materials on the site upon the defendant.” The court also thoroughly discussed the risks assumed by the defendant under the contract and found that the plaintiff was not obligated to test the waste “except in the context of doing verification testing, which the parties do not dispute. All characterization of the waste that had previously been done in phases I and II of the project, which work had been approved by the EPA, was disclosed to the defendant as part of the bid process and within the contract documents. The contract specifically addressed the characterization of the waste . . . [and required it to be conducted by the contractor]. . . . The fact that the defendant may not have accounted for the potential contamination or testing of some structural steel, which had been thought to have been recyclable, and therefore resulted in the need for additional work both in terms of time and labor, was a risk that it contractually bore.” (Citation omitted.) The court further stated that “[t]he contract expressly made clear that the risk of the condition of the materials being different than anticipated was solely on the contractor. Hence, if it turned out that the assumption as to the recyclability of the steel was wrong, the risk as to the quantity and value of any recyclable steel was to be borne by the [defendant]. Both the original bid form and the proposed/executed contract documents so stated.” These findings are amply supported by the clear language of the contract and the documents related thereto that were submitted into evidence. The defendant‘s claim on appeal that the plaintiff was required to do the testing that the defendant, itself, had contracted to perform simply lacks merit.
3
Although, on appeal, the defendant casts the primary issue as involving the plaintiff‘s
The defendant‘s claim that this case concerns the issue of the plaintiff‘s obligation to characterize the waste based on the requirements of certain EPA regulations, not on the pertinent language of the contract, is undercut by the defendant‘s arguments before the court and in its posttrial brief, which is replete with arguments relating to the provisions of the contract. Although, in making those arguments, the defendant referred to EPA regulations, its claims at trial were premised on the contract, and the defendant relied on those regulations as a basis for its claim that the plaintiff breached the contract. On appeal, however, the defendant, without reference to the contract and as an excuse to escape its contractual obligations, argues that the plaintiff‘s conduct constitutes a violation of those regulations and that the court erred in failing to find such a violation. The defendant cannot take one path at trial and, when that fails, choose another on appeal. See Bligh v. Travelers Home & Marine Ins. Co., 154 Conn. App. 564, 577, 109 A.3d 481 (2015) (“[o]rdinarily appellate review is not available to a party who follows one strategic path at trial and another on appeal, when the original strategy does not produce the desired result” (internal quotation marks omitted)). The defendant‘s claim, therefore, fails.
4
Finally, it is also important to note the court‘s finding that, “[i]n this transaction, the defendant was a sophisticated and experienced party in a highly specialized area of work, which had, or had available to it if it wished, the advice of consultants or counsel prior to entering into the transaction. In fact, the defendant‘s president, Goldblum, is himself an attorney. In the bid documents, the defendant provided a detailed and extensive list of its experience in the field of demolition, remediation and abatement, referencing fifty-three projects it had completed or [was] actively working on between 2008 and 2014.” The court further found that the defendant “was given every opportunity to address any issues it had with the proposed terms and interpretation of the contract prior to its execution,” that “[i]t was not an innocent [party] that was somehow unknowingly duped into entering into an agreement of which it had no real knowledge or understanding,” and that, even though the court understood “the source of the frustration and dismay of the defendant as to the condition of the property being other than that which it had assumed,” under the contract, the defendant bore the risk of its failure to account “for the potential contamination or testing of some structural steel which had been thought to have been recyclable . . . .”
With the benefit of hindsight, the defendant, in an effort to shift the burden and responsibility for site testing from it to the plaintiff, effectively is requesting this court to rewrite its contract
B
The defendant next claims that the court erred in not finding that the contract was impossible to perform. We decline to review the claim.
This court previously has addressed the defense of impossibility, stating: “Practice Book § 10-50 provides that [f]acts which are consistent with [the claimant‘s allegations] but show, notwithstanding, that the plaintiff has no cause of action, must be specially alleged. . . . The defense of impossibility does not aim to establish the absence of a breach of the contract; rather it assumes breach and instead seeks to show that a party is excused from performance because at the time [the] contract [was] made, [his] performance under it is impracticable without his fault because of a fact of which he has no reason to know . . . . 2 Restatement (Second), Contracts, Existing Impracticability or Frustration § 266, p. 338 (1981). Accordingly, such defense must be specially pleaded.” (Citation omitted; internal quotation marks omitted.) Howard-Arnold, Inc. v. T.N.T. Realty, Inc., 145 Conn. App. 696, 711-12, 77 A.3d 165 (2013), aff‘d, 315 Conn. 596, 109 A.3d 473 (2015).
In the present case, the plaintiff argues that this court should decline to review the defendant‘s impossibility claim because it was not pleaded as a special defense. It claims that, because the defendant failed to plead a special defense of impossibility, the court did not undertake the necessary analysis of such a claim, nor did it make findings thereon, and, thus, it could not have erred in failing to find that the defendant‘s performance under the contract was impossible. In opposition, the defendant argues that the issue of impossibility is properly before this court. Specifically, the defendant claims that it raised the claim in its posttrial brief and that the court addressed
First, we note that the defendant has not addressed in its reply brief the issue raised by the plaintiff concerning the defendant‘s failure to plead impossibility as a special defense, which, by itself, is fatal to its claim, as our case law is clear that impossibility must be pleaded as a special defense. See id. The court, therefore, could not have erred in failing to make a finding on an issue that was not properly before it. Moreover, the defendant relies on its claims that the court addressed the issue in its decision and that the defendant raised the issue in its posttrial brief as part of its argument that the plaintiff materially had breached the contract. Our review of the court‘s decision, however, demonstrates that, although the court referenced a number of the defendant‘s claims, including the claim that the plaintiff‘s mischaracterization of the steel made it impossible for the defendant to perform under the contract, the court did not make any express findings regarding whether the contract itself was impossible to perform. The only finding regarding impossibility made by the court was its finding that, given the course of events that had transpired, as of December, 2015, it would have been impossible for the defendant to complete the work in a timely manner; the court never made a finding that it would have been impossible for the defendant to perform the work under the contract in the first place beginning in September, 2015, as claimed by the defendant on appeal.
Additionally, even if the issue of whether it was impossible for the defendant to perform its obligations under the contract was properly before the court, because the court failed to make any findings as to that issue, we would have to speculate as to whether the court rejected the claim or simply overlooked it. It was incumbent on the defendant to seek an articulation of the court‘s decision as to its failure to make a finding on a claim the defendant alleges was properly before the court. In the absence of such an articulation, the record is inadequate for us to review the claim. See McCarthy v. Chromium Process Co., 127 Conn. App. 324, 335, 13 A.3d 715 (2011) (“It is well established that [i]t is the appellant‘s burden to provide an adequate record for review. . . . It is, therefore, the responsibility of the appellant to move for an articulation or rectification of the record where the trial court has failed to state the basis of a decision . . . to clarify the legal basis of a ruling . . . or to ask the trial judge to rule on an overlooked matter. . . . In the absence of any such attempts, we decline to review this issue.” (Internal quotation marks omitted.)).
C
The defendant next claims that the court improperly determined that the plaintiff lawfully had terminated the contract.15 In support of this claim, the defendant argues that “[a] party to a contract already in default cannot terminate the other,” and that the plaintiff “was clearly in default by the end of November when the CWP was rejected.” Thus, according to the defendant, “[u]nless and until the CWP was approved, [the defendant] had no authority to perform any work that affected PCB contaminated waste.” We are not persuaded.
We first note that the court did not make an express finding that the plaintiff lawfully had terminated the contract. Such a finding, however, can be inferred from the court‘s rejection of count three of the
The defendant‘s claim that the plaintiff did not lawfully terminate the contract is premised on a faulty assumption, namely, that the plaintiff was in default under the contract. The record does not support that assertion, and the court made no such finding of default by the plaintiff. In fact, the court expressly found that the plaintiff had performed its obligations under the contract and that there was ample evidence of the defendant‘s breach. Specifically, the court stated: “First, the contract contained a ‘time is of the essence’ clause requiring the defendant to finish the job on or before February 1, 2016. TRC had granted a six day extension to allow for the testing of the expansion joint caulking for PCB contamination as requested by the EPA, which moved the deadline back to February 7, 2016. There was credible testimony from Doubleday, Zarba and [Richard] McManus that the defendant would not have been able to meet that deadline. Collectively they cited several factors, including, but not limited to: (1) the defendant waiting seven weeks (forty-eight days) before obtaining a demolition permit for the job site; (2) the multiple delays in preparing an acceptable CWP, which included over a month‘s delay while the defendant hired a consultant to review the plan; (3) the defendant‘s election to demobilize from the site on or about November 20, 2015; (4) McManus’ opinion that the milling of the concrete called for in the contract would take sixty-nine days as opposed to the thirty days the defendant had estimated; (5) the ongoing dispute over who was responsible for the testing of the steel for PCB contamination despite the plaintiff‘s continued insistence that it was the defendant‘s obligation to do so; (6) the defendant‘s delay between at least November 3, 2015, and November 27, 2015, in submitting a written change order request based on its repeated oral claim that several of the EPA requirements specified in the approval letter were the basis for a change in the contract despite TRC‘s equally repeated response that such a claim would only be considered if submitted in writing pursuant to the contract; (7) the failure to submit a revised [health and safety plan]; (8) the failure to submit a demolition work plan; (9) the November 20, 2015 letter from the defendant and statement at the December 8, 2015 job meeting advising the plaintiff that the defendant would not proceed with any further work on the job until a CWP was done; (10) its statement in that same letter and at the job meetings on November 24, 2015, December 1, 2015, and December 8, 2015, that it would not perform any work if [it] was required to sample the steel; (11) that the issues on the characterization of the steel and the paint chip testing were still to be resolved; (12) that less than 10 percent of the work called for on the project had been completed as of both December of 2015 and the date of the termination; and (13) based on its December 15, 2015 letter to the plaintiff claiming a ninety-four day delay due to plaintiff‘s actions and the defendant‘s own proposed revised project schedule that called for a completion date of May 4, 2016. Given these facts, it is clear that it would have been impossible for the defendant to have finished the job by February 6, 2016.” (Footnotes omitted.)
These findings provide ample support for the court‘s determination that, in December,
D
The defendant next claims that evidence of certain change orders executed by the plaintiff in connection with its contract with Costello, pursuant to which the plaintiff had agreed to modify terms of that contract, constituted admissions that the plaintiff‘s contract with the defendant was defective and could not be performed by the defendant as written. We disagree.
In its memorandum of decision, the court found that Costello submitted eleven change order requests during the course of its work on the project and that most of those requests were approved by TRC. The court further stated: “The defendant has argued that the court should also consider the conduct of the plaintiff in its handling of the similar contract with Costello following the rebid of the project. The defendant argues that, as to Costello, TRC allowed change orders similar to those asked for [by the defendant] and denied to the defendant by TRC, and that those change orders often revolved around the requirements for testing and decontamination. This, the defendant contends, is an admission on the part of the plaintiff as to the actual intent of the contract, which was that the original obligation for the testing of PCB contamination was that of the plaintiff. To this end, the defendant cites Putnam Park Associates v. Fahnestock & Co., 73 Conn. App. 1, 10-11, 807 A.2d 991 (2002), for the general proposition that a court may use the parties’ actions as an aid to determine the meaning of the contract. While that general proposition is true, the defendant‘s reference to the case is misplaced, as the defendant asks the court to look at the actions of the plaintiff with respect to a different party on a different, albeit similar, contract. . . . The plaintiff‘s actions do not involve the same two parties and, therefore, the principle cited is inapplicable.” (Citation omitted.) We agree with the court.
The fatal flaw in the defendant‘s argument is its failure to acknowledge the basis for the change orders sought by Costello. Approximately eight months after the defendant‘s contract with the plaintiff was terminated, the defendant directly contacted the EPA by e-mail regarding certain paint chip sampling requested by the defendant as part of this litigation that was to be performed on the site in accordance with an order of the trial court dated August 19, 2016.17 This resulted in a series of e-mails and telephone calls between the defendant and representatives of the EPA and had the effect of interrupting the work being performed by Costello. Subsequently, TRC submitted to the EPA a plan proposed by Costello for PCB sampling, after which a series of correspondence between the plaintiff and the EPA followed. Those exchanges included “a comment by the EPA that should the paint chip samples sought by the defendant (in the court action) reveal PCBs in the paint, a change to the decontamination plan might be necessary.” The results of that paint chip sampling did prompt the EPA to require additional testing of the steel beams and other materials, including testing of roofing material, which caused additional expenses
Following its examination of the language of the contract and the approval letter, and its consideration of the expert testimony presented,18 the court found that paint chip sampling was not required to be done by the plaintiff under its contract with the defendant. That finding is supported by the record and is not clearly erroneous. The defendant‘s claim, therefore, that the change orders granted to Costello in connection with the additional paint chip testing requirements imposed by the EPA, which were not part of the defendant‘s contract with the plaintiff, constituted an admission by the plaintiff that its contract with the defendant could not be performed without such testing is contrary to the record and fails.
II
THE CROSS APPEAL
In its cross appeal, the plaintiff challenges the court‘s award and calculation of damages. Specifically, the plaintiff claims that the court erred in its award and calculation of damages with respect to the following: (1) “the court interpreted the contract‘s liquidated damages provision . . . as the only measure of damages available for all elements of the [plaintiff‘s] loss when that provision is not the exclusive measure of damages for breach and does not preclude the award of the [plaintiff‘s] nondelay damages, inclusive of direct and consequential damages unrelated to delay in [the project‘s] completion“; (2) “there is no lawful basis for limiting per diem [liquidated damages] to 254 days“; and (3) “the court erred in its prospective calculation of damages by not taking into account the $167,652 paid by the [plaintiff] to [the defendant] when it compared [the defendant‘s] and Costello‘s contracts for the purpose of determining the [plaintiff‘s] completion costs.”19 We agree with the plaintiff‘s first claim.
We first set forth the following findings concerning the issue of damages made by the court in its memorandum of decision: “[T]he plaintiff has submitted a summary of damages with supporting documentation claiming an amount due of $1,855,936. . . . Categorically, the claimed damages fall into three areas. First, the difference in the contract price between the defendant and Costello for the job to be done. Second, additional expenses for the rebidding of the job and the engineering support that went with it. Third, project damages for both contractual liquidated damages and additional work the plaintiff was required to do as a result of the defendant‘s unilateral communications with the EPA following its dismissal from the job.
“As to the first category, the difference in the contract price, the defendant‘s accepted bid in June, 2015, was $2,713,950.
“As to the second category, the additional expenses for the rebidding of the job and the engineering support that went with it, the plaintiff claims payments of $167,652 made to the defendant, payments of $92,300 toward construction support in 2015, the escalation of unit prices resulting in an additional cost of $17,913, payments of $47,230 toward the support of the rebid process, $23,800 for the disposal of bags with asbestos containing material that had been left on-site by the defendant, $10,259 for fencing, and $583 for advertisement of the project rebid. These expenses total $359,737. The court finds evidentiary support for most of the claimed expenses. However, the expense of $167,652 is not properly claimed as damages as these were payments for work done by the defendant, which had been approved by TRC following the submission of the defendant‘s first two pay applications. . . . Accounting for that payment, the total expenses claimed are $192,085.
“As to the final category, project damages for both contractual liquidated damages and the additional work the plaintiff was required to do as a result of both the court action and the defendant‘s communications with the EPA following its dismissal from the job, the plaintiff claims a total amount due of $1,247,942. The largest component of the figure comes from the claim of liquidated damages in the amount of $520,000 for the 260 day period commencing from February 1, 2016, at the rate of $2000 per day. In order to complete the work that remained to be done after the defendant‘s dismissal, Costello‘s March 31, 2016 bid of $2,962,207 was accepted by the plaintiff. . . . Costello later commenced work on the project on essentially the same terms as the defendant. Following Costello‘s preparation of a CWP and other minor work, it received notice from the plaintiff on October 5, 2016, that the EPA had approved the CWP and [that it] could commence work in earnest. . . . However, in the fall of 2016, additional work was required to be done on the project, which included additional PCB [testing] and . . . testing [of asbestos containing materials], decontamination, shearing and sizing of steel beams, site maintenance, and disposal of additionally identified contaminated waste and other tasks. These specific costs were reflected in, but not limited to, change orders [numbers] 3, 5, 6, 7, 8, 9, 10 and 11. . . . All of the other additional work was necessary as a result of Insall‘s correspondence on behalf of the defendant to the EPA between September 1, 2016, and November 21, 2016, long after the defendant had been dismissed from the job. That correspondence raised the issue of paint chip testing for PCB contamination at the site and claimed that other debris had come in contact with contaminated soil. This necessitated stopping work on the project from December 5 to December 16, 2016, and eventually resulted in at least an additional 200 paint chip tests. . . . Some of the other damages claimed, outside of the change orders, related to the paint study that had been initiated but not completed, and the potential for additional disposal costs related to the steel. The total amount claimed as to all of these actual and estimated costs is $1,247,942.
“With respect to that third category, the plaintiff‘s claim of liquidated damages for the defendant‘s failure to timely complete
The court next examined the liquidated damages provision of the contract and determined that it was a valid, enforceable provision of the contract, as it met the three criteria necessary to establish that the provision is one for liquidated damages and not a penalty. The court, after citing the principle set forth in Hanson Development Co. v. East Great Plains Shopping Center, Inc., 195 Conn. 60, 64, 485 A.2d 1296 (1985), that “a seller may not retain a stipulated sum as liquidated damages and also recover actual damages,” concluded that the plaintiff was “limited in its claim of damages to those attributable under its liquidated damages provision, article 2, § 2.1.1. Although such damages are often typically determined by when the job is finally completed by the breaching party, here the plaintiff dismissed the defendant from the job. Costello was hired to finish the job, but because of the defendant‘s interaction with the EPA and the subsequent additional work and testing, it was unable to do so as the funds available to the plaintiff to complete the project were exhausted. Although the job was never completed, the plaintiff has not sought liquidated damages beyond 260 days (adjusted to 254 days), which falls shortly after Costello received notice of the EPA‘s approval of the CWP. Thus, the total amount of liquidated damages due the plaintiff is found to be $508,000.
“As to any finding of damages, it remains for the court to address the retainage20 held by the plaintiff in excess of the statutory limits set forth in . . .
Before we address the merits of the claims on the cross appeal, we set forth our standard of review. “As a general rule, in awarding damages upon a breach of contract, the prevailing party is entitled to compensation which will place [it] in the same position [it] would have been in had the contract been properly performed. . . . Such damages are measured as of the date of the breach. . . . For a breach of a construction contract involving defective or unfinished construction, damages are measured by computing either (i) the reasonable cost of construction and completion in accordance with the contract, if this is possible and does not involve unreasonable economic waste; or (ii) the difference between the value that the product contracted for would have had and the value of the performance that has been received by the plaintiff, if construction and completion in accordance with the contract would involve unreasonable economic waste.” (Internal quotation marks omitted.) Naples v. Keystone Building & Development Corp., 295 Conn. 214, 224, 990 A.2d 326 (2010); see also Duffy v. Woodcrest Builders, Inc., 2 Conn. Cir. 137, 143, 196 A.2d 606 (1963) (“[i]n the case of a defaulting building contractor, the situation is normally that of recovering the reasonable cost of getting the work done by another” (internal quotation marks omitted)).
“The [injured party] has the burden of proving the extent of the damages suffered. . . . Although the [injured party] need not provide such proof with [m]athematical exactitude . . . the [injured party] must nevertheless provide sufficient evidence for the trier to make a fair and reasonable estimate. . . . As we have stated previously, the determination of damages is a matter for the trier of fact. . . . Accordingly, we review the trial court‘s damages award under the clearly erroneous standard, under which we overturn a finding of fact 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.) DeMattio v. Plunkett, 199 Conn. App. 693, 721-22, 238 A.3d 24 (2020).
A
The plaintiff claims that the court erred in determining that the contract‘s liquidated damages provision was the exclusive measure of damages for breach of the contract. We agree.
Because the plaintiff‘s challenge to the court‘s interpretation of the liquidated damages provision in the contract as being the plaintiff‘s exclusive remedy for the defendant‘s breach of the contract involves a matter of contract interpretation, we set forth our well established standard of review governing such claims. “[W]here there is definitive contract language, the determination of what
In the present case, liquidated damages are covered by article 2 of the contract. Article 2, § 2.1, which governs the time frame of the contract, provides: “The contract period is established from the Notice to Proceed issued by the Engineer for a period of 140 days, including weekends and holidays. The work should be substantially complete at that time, unless the Contractor has been granted an extension by methods defined and prescribed herein.” That provision is followed by § 2.1.1, titled “Liquidated Damages,” which provides: “Failure of the Contractor to meet this established timeframe will result in liquidated damages being assessed in the amount of $2,000/day for each and every calendar day beyond the contract time limit.” Section 2.1.2 of article 2 further provides that time is of the essence23 for the general performance of the contract and, additionally, that, “[i]n the event the Contractor fails to perform the work in a timely manner due to the Contractor‘s poor planning, financial status, errors in construction or any other reason directly attributed to the Contractor‘s circumstances, the [plaintiff] may institute default proceedings against the Contractor to recover damages and losses.” (Emphasis added.)
In making its determination that liquidated damages were the plaintiff‘s exclusive remedy under the contract, the court cited Hanson Development Co. v. East Great Plains Shopping Center, Inc., supra, 195 Conn. 64, for the principle that “a seller may not retain a stipulated sum as liquidated damages and also recover actual damages.” Specifically, the court stated: “Where the parties have entered into a voluntary agreement as to how to address any potential damages from a breach of contract, such agreement if validly entered into is to be enforced. Therefore, the plaintiff‘s claim for both liquidated damages and consequential damages is an attempt to have its cake and eat it too. In Saturn Construction Co. [v. Dept. of Public Works, Superior Court, judicial district of Hartford, Docket No. CV-93-0704690-S (October 17, 1994), in which the court found enforceable a liquidated damages provision in a state contract that provided for liquidated damages of $1000 per day for failure to complete a construction job in a timely manner], Judge Sheldon noted that it is possible, depending on the wording of the liquidated damages provision, to obtain both under narrow circumstances: ‘[A]lthough an unrestricted liquidated damages clause operates as a bar to the recovery of
We conclude that the court improperly determined that liquidated damages were the plaintiff‘s exclusive remedy under the contract. Our Supreme Court has “long . . . held that contracting parties may decide on a specified monetary remedy for the failure to perform a contractual obligation.” Bellemare v. Wachovia Mortgage Corp., 284 Conn. 193, 203, 931 A.2d 916 (2007). Moreover, “[p]arties to a contract may agree on the remedies available in the event of a breach of contract. If the language of the agreement discloses that the parties intended to limit the remedies to those stated, the agreement will be enforced and the party will be limited to the exclusive remedies outlined in the agreement. . . . A contract will not be construed to limit remedial rights unless there is a clear intention that the enumerated remedies are exclusive.” (Emphasis added; internal quotation marks omitted.) International Marine Holdings, Inc. v. Stauff, 44 Conn. App. 664, 676, 681, 691 A.2d 1117 (1997). That principle is supported by the language of the Uniform Commercial Code and
The language of the contract in the present case does not support the court‘s conclusion that liquidated damages were the plaintiff‘s exclusive remedy. The liquidated damages provision in § 2.1.1 of article 2, which provides that the failure of the contractor to meet the time frame established therein will result in liquidated damages, clearly applies to damages resulting from delay; there is no language expressly stating that such damages are the plaintiff‘s exclusive remedy for a breach of the contract not related to the defendant‘s delay in performance, and the fact that the contract provided for liquidated damages caused by the defendant‘s failure to perform the work within the time frame set forth in the contract does not, by itself, demonstrate a clear intent that such delay damages are the exclusive remedy available to the plaintiff under the contract, which must be viewed in its entirety. See Vaccaro v. Shell Beach Condominium, Inc., 169 Conn. App. 21, 49, 148 A.3d 1123 (2016) (“[t]he contract must be viewed in its entirety, with each provision read in light of the other provisions . . . and every provision must be given effect if it is possible to do so” (internal quotation marks omitted)), cert. denied, 324 Conn. 917, 154 A.3d 1008 (2017). In the present case, the time is of the essence provision in § 2.1.2 of article 2 of the contract specifically allows the plaintiff to institute default proceedings against the defendant to recover “damages and losses” if the defendant fails “to perform the work in a timely manner due to the [defendant‘s] poor planning, financial status, errors in construction or any other reason directly attributed to the [defendant‘s] circumstances . . . .” Notably, § 2.1.2 of article 2 does not reference “liquidated damages“; instead, it refers to
We next must reconcile our conclusion with the general principle cited by the trial court that “a plaintiff may not recover both liquidated damages and actual damages.”24 McClintock v. Rivard, 219 Conn. 417, 430 n.13, 593 A.2d 1375 (1991). We hold that, under the specific language of the contractual provisions at issue here, our conclusion is not inconsistent with that principle. When, as here, a liquidated damages provision is limited in its application to damages resulting from delays and does not expressly provide that liquidated damages are the exclusive remedy, it does not prevent the recovery of actual damages for items to which the liquidated damages provision does not apply, i.e., nondelay damages. See 22 Am. Jur. 2d, Damages § 539 (2022) (“[a] provision for liquidated damages does not prevent the recovery of actual damages caused by events that are not covered by the liquidated damages clause unless the contract expressly precludes the recovery of damages other than those enumerated“). It stands to reason that, so long as the predicate for both awards is not the same, the recovery of both liquidated damages and actual or consequential damages will not result in an impermissible double award. Accordingly, although, because of the liquidated damages provision, the plaintiff cannot additionally recover actual or compensatory damages resulting from the delays caused by the defendant, the liquidated damages provision of the contract does not preclude the plaintiff from recovering from the defendant nondelay actual and consequential damages.
Although Connecticut courts have not yet squarely addressed this issue,25 our
Provisions of a contract clearly expressed do not cease to be binding upon the parties, because they relate to the measure of damages . . . . J.E. Hathaway & Co. v. United States, 249 U.S. 460, 464 (1919).” (Citations omitted; internal quotation marks omitted.)
Our conclusion also gives effect to the plain language of article 2, § 2.1.2 of the contract, providing that, if the defendant failed to complete its work in a timely manner due to the various reasons set forth, including poor planning or “any other reason directly attributed to the [defendant‘s] circumstances,” the plaintiff could institute default proceedings to recover damages and losses, which necessarily must mean damages and losses other than those attributable to the delays. See Old Colony Construction, LLC v. Southington, supra, 316 Conn. 212 (determination of whether defendant was entitled to default based remedies was governed by express terms of parties’ contract). It can be inferred from the court‘s many findings in its comprehensive decision that the defendant‘s failure to complete the work in a timely manner was due to poor planning or other reasons attributable to the work it agreed to perform, as the court found that the plaintiff had performed its obligations under the contract; that “the defendant may have used a mistaken basic assumption in making its bid and entering into the contract, which ultimately resulted in consequences adverse to it“; that the defendant‘s delay in doing the necessary testing and work was primarily the result of the defendant failing to “submit an acceptable CWP, [health and safety plan] and demolition work plan to TRC so that it could, in turn, submit any needed documents to the EPA for its approval, which was necessary for substantive work to begin“; that the defendant elected to demobilize from the site on or about November 20, 2015; that the defendant had refused to proceed with any further work until a CWP was done or if it was required to sample the steel; that, as of December, 2015, the defendant had finished less than 10 percent of the work required under the contract; and that the defendant had failed to account for the potential contamination or testing of some structural steel, which had been thought to have been recyclable and which, thereby, resulted in the need for additional work both in terms of time and labor.
We conclude, therefore, that the court erroneously failed to determine whether the plaintiff proved that it had suffered any compensable actual or consequential nondelay damages and, if so, the amount of such damages. Because the court did not make any factual findings about the existence and amount of the plaintiff‘s compensable nondelay related damages, we must remand this case to the trial court for a new hearing in damages.27 At trial, the
With respect to the first category of damages—the difference in contract price between the plaintiff‘s contract with the defendant and its contract with Costello—the plaintiff argues on appeal that “[t]he court erred in failing to account for [the $167,652 sum it had paid to the defendant] when it calculated the difference between [the defendant‘s] and Costello‘s contract price.” On remand, not only will the court need to calculate the difference in price between the two contracts, but it also will need to consider any differences in the scope of the two contracts, as well as the fact that the defendant‘s contract with the plaintiff had been partially performed, which will factor into the court‘s calculation of the cost of the remaining work covered under the plaintiff‘s contract with Costello. Put another way, the plaintiff is entitled to damages for services that the defendant was supposed to complete but that Costello completed for a higher price.
As to the second category of damages—damages associated with rebidding the project—the court will need to determine whether the requested damages are either delay or nondelay damages. For example, a claim that the plaintiff incurred additional costs to oversee the project because it was delayed would be covered by the liquidated damages clause of the parties’ contract and may not be additionally awarded as actual damages. On the other hand, the costs of drafting, printing, and distributing the new bid package and of reviewing bids submitted in response thereto would not be delay damages because they are damages caused by the defendant‘s failure to perform, rather than its delayed performance.
Finally, for the third category of damages—the plaintiff‘s claimed additional costs to complete the job over Costello‘s contract price—the court will need to determine whether such costs naturally flow from the defendant‘s default of its performance obligation under the parties’ agreement and whether they were foreseeable to the defendant. On remand, therefore, the court must determine if the alleged damages flowing from the defendant‘s posttermination conduct have a sufficient nexus to its breaches of the contract, which the court found occurred in November and December, 2015, prior to when the plaintiff terminated its contract with the defendant in January, 2016. See Calig v. Schrank, 179 Conn. 283, 286, 426 A.2d 276 (1979) (“[i]t is hornbook law that to be entitled to damages in contract a plaintiff must establish a causal relationship between the breach and the damages
B
The last issue we must address is the plaintiff‘s claim that the court erred in limiting the award of liquidated damages to 254 days. We disagree.
In its memorandum of decision, the court specifically found that, “[a]lthough the job was never completed, the plaintiff has not sought liquidated damages beyond 260 days (adjusted to 254 days), which falls shortly after Costello received notice of the EPA‘s approval of the CWP. Thus, the total amount of liquidated damages due the plaintiff is found to be $508,000,” which the court adjusted to $489,372 after it accounted for the retainage held by the plaintiff. (Emphasis added.) In its cross appeal, however, the plaintiff seeks additional liquidated damages for a time period that was not requested at trial. Specifically, in its appellate brief, the plaintiff explains that it had calculated liquidated damages “through the date on which Costello reached the same point in the project where [the defendant] left off” on the basis of its “understanding that [liquidated damages] were not the exclusive measure of its damages. The exhibit [submitted into evidence by the plaintiff detailing the damages it sought] was compiled based on the premise that it would be unfair to seek [liquidated damages] against [the defendant] during Costello‘s performance of project work.” Given the court‘s determination that liquidated damages were the plaintiff‘s exclusive remedy under the contract, however, the plaintiff now claims on appeal that liquidated damages “should have been run through the date of the court‘s decision on December 20, 2019, a period of 1413 days.”
This claim requires little discussion. It is well settled that “[a] party cannot present a case to the trial court on one theory and then seek appellate relief on a different one . . . . For this court to . . . consider [a] claim on the basis of a specific legal ground not raised during trial would . . . [be] unfair both to the [court] and to the opposing party.” (Emphasis omitted; internal quotation marks omitted.) Overley v. Overley, 209 Conn. App. 504, 512, 268 A.3d 691 (2021). “[A]n appellate court is under no obligation to consider a claim that is not distinctly raised at the trial level. . . . The requirement that [a] claim be raised distinctly means that it must be so stated as to bring to the attention of the court the precise matter on which its decision is being asked. . . . The reason for the rule is obvious: to permit a party to raise a claim on appeal that has not been raised at trial—after it is too late for the trial court . . . to address the claim—would encourage trial by ambuscade . . . .” (Emphasis in original; internal quotation marks omitted.) Id., 511. In the present case, the plaintiff requested that the court award liquidated damages for a period of 260 days, which was adjusted by the court to account for a period of time in which the contract had been extended. The court awarded the plaintiff exactly what it had requested, with the exception of the adjustment, which the plaintiff has not challenged. We agree with the defendant that the plaintiff cannot on appeal now claim that the court should have based its award on a time period different from the one that the plaintiff relied on and requested at trial. See White v. Mazda Motor of America, Inc., 313 Conn. 610, 619-20, 99 A.3d 1079 (2014). Furthermore, the plaintiff‘s claim is premised on the court‘s determination that liquidated damages were the plaintiff‘s exclusive remedy. Because we have concluded that the court erred in reaching that conclusion and that the plaintiff is entitled to actual or consequential nondelay damages to the extent they can be proved by a preponderance of the evidence, the premise of the plaintiff‘s claim on appeal no longer exists. Accordingly, this claim fails.
III
CONCLUSION
In summary, the court properly rendered judgment in favor of the plaintiff on its breach of contract claim. Although the court‘s award of liquidated damages in the amount of $489,372 was proper, the court erred in concluding that liquidated damages were the plaintiff‘s exclusive remedy under the contract, which does not expressly preclude the recovery of damages other than the liquidated damages resulting from delays and, in fact, expressly allows the plaintiff to seek recovery for “damages and losses” in addition to the delay related liquidated damages. The court, thus, erroneously failed to determine whether the plaintiff proved that it had suffered any compensable actual or consequential nondelay damages and, if so, the amount of such damages. As a result, we must remand this case to the court for a new hearing in damages.
The judgment is reversed in part and the case is remanded for a new hearing in damages consistent with this opinion; the judgment is affirmed in all other respects.
In this opinion the other judges concurred.
specific issues raised by the parties in this appeal.