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Cohen v. Meyers

Court of Appeals of Connecticut

August 15, 2017


          Argued May 25, 2017

          Christopher A. Klepps, with whom was Richard D. Carella, for the appellant-appellee (plaintiff).

          Melissa S. Harris and Michael F. Dowley, for the appellees-appellants (defendants).

          Sheldon, Beach and Mihalakos, Js.

         Procedural History

         Action to recover damages for, inter alia, breach of contract, and for other relief, brought to the Superior Court in the judicial district of Middlesex, where the defendants filed a counterclaim; thereafter, the matter was transferred to the judicial district of Hartford, Complex Litigation Docket, and tried to the court, D. Sheridan, J.; judgment in part for the plaintiff on the complaint and in part for the defendants on the counterclaim, from which the plaintiff appealed and the defendants cross appealed to this court. Affirmed.


         The plaintiff sought to recover damages from the defendant general contractor, M, and the defendant R Co., of which M was the president and sole shareholder, for, inter alia, breach of a home construction contract. The defendants thereafter filed a counterclaim alleging breach of contract, defamation and intentional infliction of emotional distress. The matter was tried to the court, which rendered judgment in part for the plaintiff, concluding that R Co. had violated the Connecticut Unfair Trade Practices Act (CUTPA) (§ 42-110a et seq.) by failing to comply with the New Home Construction Contractors Act (act) (§ 20-417a et seq.) and, inter alia, by not registering as a new home construction contractor with the Department of Consumer Protection while negotiating a contract with the plaintiff. The court also rendered judgment in part for the defendants on the counts of their counterclaim alleging breach of contract and defamation. On the plaintiff's appeal and the defendants' cross appeal to this court, held:

         1. The plaintiff could not prevail on his claim that the trial court improperly failed to pierce the corporate veil of R Co. and to hold M personally liable for fraud and violation of CUTPA; although the court determined that R Co. failed to comply with the act governing new home construction contracts and that that failure constituted a violation of CUTPA, it concluded that M's control of R Co., alone, was an insufficient basis on which to pierce the corporate veil and that the plaintiff's proof did not establish wilful, malicious, immoral or deceitful conduct by M, the record having supported the court's finding that the plaintiff offered insufficient evidence to satisfy the instrumentality test for disregarding a defendant's corporate structure.

         2. The trial court properly ruled in favor of M on his defamation claim, that court having found that the plaintiff's statements that M was a cheat, thief, liar, admitted criminal, and incompetent building contractor, and that M had caused the death of a customer, cheated on his wife, or contracted a venereal disease, were defamatory per se, and that the plaintiff had not met his burden of proof as to his special defense that the subject statements were true or substantially true; moreover, the court properly rejected the plaintiff's claims that his statements were privileged, as it found that the statements were made with actual knowledge that they were false or with reckless disregard for whether they were false, that actual malice had been proven by a preponderance of the evidence, resulting in the loss of any conditional privilege, and that the speech in question was solely a contrived means for malicious harassment on a matter of private concern and, thus, was not constitutionally protected as concerning a matter of public concern, and this court adopted the reasoning of the trial court as a proper statement of the facts and legal analysis on the issues raised on appeal.

         3. The defendants could not prevail on their claim on cross appeal that the trial court improperly awarded the plaintiff damages on his CUTPA claim against R Co. because the plaintiff did not prove that he suffered any compensable injury as a result of R Co.'s failure to comply with the act governing new home construction contracts: the court, which credited the plaintiff's testimony that he received the necessary disclosures from R Co. as required under the act, and that it was highly likely that he would not have contracted with or paid R Co. the sum of $54, 750, awarded the plaintiff compensatory damages for that amount, for which he received little or no benefit and which represented his out-of-pocket costs directly associated with the parties' contract; moreover, the fact that the parties' contractual relationship ultimately deteriorated, which also may have caused the plaintiff damages, was not a basis for concluding that the court's finding that R Co.'s CUTPA violation proximately caused the plaintiff damages was clearly erroneous.

         4. M could not prevail on his claim that the trial court improperly failed to award him punitive damages on his defamation claim; that court, which noted that it had considered all of the evidence presented at trial, declined to award punitive damages to either party without setting forth the specific legal or factual bases for its decision, and in the absence of specific details set forth by the court on which it may have relied, it was presumed that the court properly applied the law and did not abuse the wide discretion afforded to it in making that determination.

         5. M 's claim that the trial court erred in rejecting his claim for intentional infliction of emotional distress was unavailing; the court found that even if the plaintiff was engaged in a personal vendetta intended specifically to humiliate and harass M or to make him lose his job, the specific conduct of the plaintiff did not rise to the level of extreme and outrageous conduct as a matter of law, as required to impose liability for intentional infliction of emotional distress, the court having properly focused on the conduct on which M's claim was based and the manner in which the plaintiff undertook his campaign to harm M's personal and professional reputation, rather than the generalized characterizations of that conduct, regardless of the motivation behind it.


          SHELDON, J.

         In this case arising from a home construction contract, both parties appeal from the judgment of the trial court. The plaintiff, Joseph Cohen, brought this action against the defendants, Robert M. Meyers and Robert M. Meyers, Inc. (RMMI), stemming from a contract for the construction of a new home to be built by RMMI on a lot of land that Cohen had owned for many years prior to entering into said contract. Cohen's nine count revised complaint alleged the following claims against Meyers: breach of contract, fraud, unjust enrichment, violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., statutory theft in violation of General Statutes § 52-564, and conversion. Cohen alleged the following claims against RMMI: breach of contract, rescission, and violation of CUTPA. The defendants filed an answer denying Cohen's allegations or leaving him to his proof, set forth various special defenses, and asserted counterclaims for breach of contract, defamation, and intentional infliction of emotional distress. Cohen denied the special defenses advanced by the defendants in response to his complaint. Cohen also denied or left the defendants to their proof as to their counterclaims and asserted special defenses to those counterclaims, claiming abandonment and fraud as to the breach of contract counterclaim, and truth and privilege as to the defamation counterclaim. The defendants denied Cohen's special defenses.

         After a bench trial, the court, D. Sheridan, J., filed a memorandum of decision in which it found in favor of Cohen on his CUTPA claim against RMMI, and awarded damages on that claim in the amount of $54, 750. The court rejected all of Cohen's additional claims against the defendants. The court found in favor of RMMI on its counterclaim for breach of contract, but found that it had failed to prove damages resulting from that breach, and thus awarded it nominal damages in the amount of $1. The court found for Meyers on his defamation claim and awarded him noneconomic damages in the amount of $100, 000. The court found in favor of Cohen on the defendants' counterclaim for the intentional infliction of emotional distress. The court declined to award punitive damages to either party.

         On appeal, Cohen challenges the court's judgment in favor of Meyers, individually, on his claims for fraud and violation of CUTPA, asserting that the court erred in declining to pierce RMMI's corporate veil. Cohen also claims that the court improperly held him liable for defamation because his speech was protected by the first amendment, he did not make any of the allegedly defamatory statements against Meyers with actual malice, the court employed the wrong legal standard in determining the issue of malice, and each of his allegedly defamatory statements was substantially true even though the burden of proof was assertedly on Meyers to prove that they were not.

         In their cross appeal, the defendants first claim that the court erred in awarding damages on the plaintiff's CUTPA claim against RMMI because he failed to prove that he suffered any actual loss or injury as a result of the CUTPA violation. Meyers also claims that the court erred in failing to award punitive damages on his defamation claim and in rejecting his claim for intentional infliction of emotional distress. We affirm the judgment of the trial court.

         The trial court found the following relevant facts. ‘‘In October, 1999, Cohen bought a parcel of undeveloped land within the town of Chester . . . known as 11 Kings Highway, with the intention of someday building a single-family home upon the property.

         ‘‘At the time of Cohen's purchase of . . . 11 Kings Highway, a ‘driveway' surfaced with sand and crushed gravel and protected by adjacent drainage swales, had been in place since 1987. When Cohen bought the lot in 1999, his ‘understanding' was that the land was ‘a fully buildable lot, ' with approvals in place. Cohen also referred in his testimony to the property asan ‘approved building lot.' The only additional permit or approval he understood he needed prior to commencing construction was for a septic system, which would require a satisfactory percolation test. Cohen testified that, based on discussions with the Chester zoning enforcement officer, which occurred in 1999 and again in 2002, he continued to believe that-except for septic-all approvals were in place and he ‘had no concerns' about his ability to build a house on the property using the existing driveway for access and the existing drainage swales for erosion control.

         ‘‘In 2005, the town of Chester Planning and Zoning Commission adopted new driveway regulations. While the existing driveway on the 11 Kings Highway property in Chester met the town's driveway requirements in place from 1987 to 2005, it did not comply with the requirements adopted in 2005.

         ‘‘In April, 2009, Cohen undertook to obtain a percolation test and septic design for the property, which was later approved. Around the same time, Cohen hired designer Brian Buckley to prepare plans for a single-family home to be built on his property in Chester. Buckley provided Cohen several names of general contractors to consider for the construction of the home, one of which was RMMI. At that time, in April, 2009, RMMI possessed a valid new home construction contractor (‘NHCC') registration.

         ‘‘Robert M. Meyers is the president and sole shareholder of RMMI. At all times RMMI acted through Meyers, and Meyers has admitted that he had ‘complete control and domination of all business and fiscal policies and procedures' of the corporation.

         ‘‘Beginning in April, 2009, there was an exchange of e-mail correspondence between Cohen and Meyers, on behalf of RMMI, which continued sporadically through January, 2010. During that time period, on October 1, 2009, RMMI's NHCC registration lapsed. Additional e-mails were exchanged from January 19, 2010 through July 28, 2010. During this time period, the parties worked out the basic aspects of their agreement, and RMMI provided a draft of a contract to Cohen. Of course, RMMI did not possess a valid NHCC registration while making any of these communications or conducting these negotiations.

         ‘‘In the last days of July, 2010, it became apparent that Cohen prepared to move forward with the building of the house. In preparation for the anticipated contract with Cohen, Meyers, on behalf of RMMI, took several actions. First, he reached an agreement with Cohen that the additional costs of land-clearing beyond that specified in their proposed written agreement would be split fifty-fifty. Cohen paid the sum of $1250 directly to the contractor, Stanley Burr, for one half the additional cost of the site-clearing cost of the property. Second, on July 30, 2010, Meyers renewed RMMI's NHCC registration. Third, on July 30, 2010, Meyers opened a commercial checking account at Citizens Bank in the name of RMMI.

         ‘‘On August 2, 2010, Cohen and RMMI signed the written ‘Agreement, ' which is appended to the complaint and was exhibit 1 at the trial. The first paragraph of the agreement clearly and explicitly states that the contracting parties are Cohen and RMMI:


         ‘‘This Agreement, made on this 2nd day of Aug. 2010, by and between Joseph M. Cohen (‘Owner') of 1060 Shermer Rd. Apt. 16 Northbrook, IL 60062-3736 and Robert M. Meyers, Inc. of 843 Haddam Quarter Rd. Durham, Connecticut (‘Builder').

         ‘‘Consistent with this recitation, the agreement is signed-once again clearly and explicitly-by RMMI, acting through its President, Robert M. Meyers. . . .

         ‘‘Certain provisions of the agreement are especially pertinent to this dispute and it is worthwhile to set them out here in full:

‘‘1. DWELLING: The Builder shall perform the work and supply all the materials to construct a single family dwelling on the property with all site improvements substantially in accordance with SCHEDULE A, the house drawing plan and Site plan. And SCHEDULE B, the specifications. (Such dwelling shall be referred to as ‘dwelling.') The Builder reserves the right to: (i) substitute any materials of like or better quality; (ii) make minor deviations from the drawing/ plans and specifications; and (iii) in the event that there is a discrepancy between the drawing/plan and the specifications, the specifications shall control.
‘‘3. PRICE AND PAYMENT SCHEDULE: The Owner agrees to pay the Builder the sum of $229, 000.00 for the construction of the Dwelling and site improvements, time being of the essence regarding the date of payment. The price shall be paid as follows:
a. $50, 000.00 Upon execution of this agreement.
b. $40, 000.00 Upon installation of septic system and digging hole for foundation.
c. $40, 000.00 Upon pouring foundation and backfilling.
d. $40, 000.00 Upon the main structure being framed and roofing installed.
e. $30, 000.00 Upon siding and gypsum board being installed and rough mechanics being installed.
f. $20, 000.00 Upon installation of flooring, cabinets, and completion of interior painting and tile.
g. Balance $9, 000.00 Upon obtaining a Certificate of Occupancy.

         ‘‘Notwithstanding the foregoing if a Certificate of Occupancy is not issued as a result of anything outside of this agreement, then the final payment shall be due as if the Certificate of Occupancy was issued on the date the Certificate of Occupancy was denied.

         ‘‘In addition, the Owner acknowledges that there may be an additional cost not provided in this agreement for water service connection fees and Electric Power Company connection fees, including but not limited to any transformer, transformer Vaults, pull stations, etc., not shown on the site plan. . . .

         ‘‘12. ENTIRE AGREEMENT: The Parties acknowledge that this agreement contains the entire understanding, terms, and conditions between the parties. This agreement cannot be changed orally, but only by agreement in writing signed by the party against whom enforcement of any waiver, change, modification, or discharge is sought. . . .

         ‘‘15. REPRESENTATIONS: In addition to any other warranties or representations contained in this agreement, the Owner warrant[s] and represent[s] to the builder that:

a. The property is an approved building lot and the builder will be able to obtain a building permit upon application and without having to comply with any special requirements of Planning and Zoning, inland-wetlands commission, or any other governmental or quasi governmental agency having jurisdiction over this property except as set forth in this agreement.

         ‘‘At the time of the signing of the agreement, Cohen issued a check to RMMI for $50, 000 in accordance with the ‘PRICE AND PAYMENT SCHEDULE' of the agreement. The check was deposited into the Citizens Bank ...

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