Submitted on briefs December 15, 2015.
Appeal from Superior Court, judicial district of Stamford, Hon David R. Tobin, judge trial referee.
Peter V. Lathouris and Richard M. Breen filed a brief for the appellant (plaintiff).
David Eric Ross filed a brief for the appellee (defendant).
Lavine, Beach and Sheldon, Js.
This appeal concerns a seller’s right to liquidated damages due to a would-be buyer’s breach of a residential real estate sales agreement. The plaintiff, Elefterios Tsiropoulos, appeals from the judgment of the trial court rendered in favor of the defendant, Margaret M. Radigan. On appeal, the plaintiff claims that the court improperly (1) determined that the liquidated damages clause in the agreement was enforceable and (2) found that his failure to perform was wilful and that the defendant was not unjustly enriched. We affirm the judgment of the trial court.
The following facts are relevant to our resolution of the plaintiff’s claims. On or about October 1, 2012, the parties signed a written contract (agreement) whereby the plaintiff agreed to purchase and the defendant agreed to sell the premises located at 6 Cardinal Lane in Westport (premises). The agreed upon sale price was $716, 000. The plaintiff made a $30, 000 deposit and was to pay the balance of $686, 000 at the closing on November 16, 2012. Although the plaintiff needed to secure financing to purchase the premises, he waived financing as a contingency to his purchase of the premises to secure the ability to purchase the premises over others who wanted to purchase the premises, but for whom financing was a contingency. The plaintiff, however, was unable to obtain a mortgage acceptable to him. On December 7, 2012, the plaintiff’s attorney informed the defendant that he was unable to close and encouraged the defendant to sell the premises to someone else. On December 28, 2012, the defendant sold the premises for $720, 000. Thereafter, the plaintiff demanded that the defendant return his $30, 000 deposit, but the defendant refused in reliance of paragraph 16 of the agreement.
On or about January 14, 2013, the plaintiff commenced the present action, which sounds in breach of contract and unjust enrichment, to recover the $30, 000 deposit. The defendant denied the material allegations of the complaint and, in an amended answer, asserted three special defenses: the plaintiff terminated the agreement wilfully, breached the covenant of good faith and fair dealing, and had unclean hands. The defendant also pleaded a counterclaim seeking to retain the $30, 000 deposit and to recover attorney’s fees. The parties tried the case to the court in May, 2014, at which time the plaintiff attempted to prove that his failure to close was not wilful because he had relied on the advice of mortgage brokers and lenders to waive a finance contingency.
The court issued its ruling from the bench, stating in part: ‘‘In the first instance, we have a presumptively valid liquidated damages clause. It is for 4.2 percent as opposed to the customary 10 percent that was the subject matter in Vines v. Orchard Hills[, Inc., 181 Conn. 501, 512, 435 A.2d 1022 (1980)]. And given the fact that we had a $716, 000 purchase price, $30, 000 was a totally reasonable number to set as a liquidated damages in the event of the [plaintiff’s] breach.
‘‘The [plaintiff] knew that he was at risk. He knew that he was taking a calculated gamble that he could close. He did not think it was a gamble because he had been assured that he could get financing. But nevertheless, in order to have his bid accepted in comparison to others that were perhaps higher but contingent, he decided to make his bid noncontingent. And by doing so, he willingly entered into a contract. There’s no indication that this contract was procured by any fraud or deception on the part of the [defendant]. The court cannot find that breach was unwilful. . . .
‘‘[T]he plaintiff in this matter had every expectation that he could obtain financing at a very high degree of leverage: 97 percent. And he has had experience in the past in leveraging properties. And he knew that he had significant obligations under prior notes, under prior mortgages he had taken advantage of the ability and the willingness of banks to lend money so as to allow him to build through his diligent efforts a substantial amount of real estate holdings. He was not an unsophisticated person in this regard. He decided to take advantage in this case . . . of the perceived availability of FHA funds, which would allow him to obtain ownership of the [premises] with a very small . . . out-of-pocket investment in case, using borrowed funds for the purchase price.
‘‘When he signed the contract without a mortgage contingency clause, he took the risk that he would be able to fulfill his desires as he set out to. And unfortunately, it took him some time before he knew or should have known that proceeding in that fashion would probably lead to his inability to perform the contract in accordance with his obligations. The first notice probably should have come when [the bank] indicated that they could not fund the loan without him changing his balance sheet to their liking. He, instead of recognizing that this was a problem with FHA loans, he chose to blame it on that particular lender, and to pursue financing through a mortgage broker that was recommended to him, but there’s no evidence that he had previously worked with that mortgage lender, only to find out that despite the fact they were willing to finance at the rate of 97 percent, they were only willing to finance 97 percent of a very, very conservative appraisal of the [premises.]
‘‘[The plaintiff] decided or opted not to try to fulfill his obligations by seeking more conventional financing. And in that regard, he put himself in the state that he found himself in, where he was unable to perform the contract on November 16, as he was obligated to do. He had three weeks within which he could have taken steps to apply for different financing, and perhaps pursue other goals. Instead, the only step apparently he took was to try to appeal [an] appraisal on the basis of comparables. [It d]oes not seem to the ...