BOOTH v. DAHL, No. CV 06-5000847 (Jun. 1, 2009)

PARKER, J.T.R.

INTRODUCTION

In 2005, the plaintiff, Thomas Booth, hereinafter "Booth," was the owner of a substantial residential property known as 3-2 Bill, Hill Road, in Old Lyme. He bought property in 1994. In May 2005 he listed the property for sale. The listing sale price was $779,000. Shortly thereafter, the defendant, Christian K. Dahl, hereinafter "Dahl," became interested in the property. Dahl viewed the property several times. On June 16 and 17, 2005, Booth and Dahl executed a Purchase Sale Agreement. Exhibit 1. The contracted sale price was $775,000. The closing date was set for July 29, 2005. Exhibit 1.

The closing was held on August 1, 2005. Pursuant to the Purchase Sale Agreement, Booth took back a purchase money mortgage in the amount of $200,000 due and payable on February 1, 2006.

Dahl did not pay the mortgage debt of $200,000 on February 1, 2006 claiming an inability to do so.

By writ, summons and complaint dated March 23, 2006, Booth brought this straightforward action to foreclose the mortgage.

Eventually, Dahl answered the Complaint and Counterclaimed against Booth for various claims relating to the condition of the property. See Answer and Counterclaim, May 11, 2006. [105.] There were two counts in the Counterclaim; First Count (Misrepresentation by Nondisclosure and Second Count (Misrepresentation).

I.

The one count of the Complaint is partially considered and discussed first. The parties have largely agreed on the underlying facts.

CT Page 9568 None of the mortgage debt was paid when due on February 1, 2006. Booth made demand on Dahl on February 8, 2006. Booth brought this action to foreclose the mortgage on March 23, 2006.

Dahl paid $100,000 on May 15, 2006. The mortgage did not have an interest clause. Plaintiff claims statutory interest at the rate of ten percent per year for the period after February 1, 2006 on the unpaid principal balances. C.G.S § 37-3a.

The court finds that the unpaid principal balance on and after May 15, 2005 is $100,000.

The main issue remaining to be decided on the Complaint involves the amount of interest, if any, due. The interest, if any, cannot be determined until the issues raised by the Counterclaim have been decided. The court defers further discussion and action on the Complaint until the issues raised by Counterclaim have been decided.

The court now turns to the Counterclaim.

II.

There are certain hard facts. Dahl first learned about the property via a newspaper ad in a local paper. This was in mid-May 2005. He visited the property alone. He then contacted the listing broker, Joseph Kelly of Page-Taft Realty. From the middle of May on he visited the property several times and investigated it. He was quite interested in purchasing it. He engaged a builder, Gary Loomis, with whom he had done business previously, to inspect the property to learn what work needed and the cost thereof. Dahl may have believed Loomis was state licensed for new home construction and state licensed as a home improvement contractor. On June 16 and 17, 2005, Dahl and Booth executed a Purchase and Sale Agreement. Exhibit 1.

After executing the Purchase and Sale Agreement, Dahl and Loomis continued to investigate the property.

The First Count of the Counterclaim is labeled and characterized by Dahl as "Misrepresentation by Nondisclosure." It is predicated on Booth's alleged failures to disclose in the Residential Property Disclosure Report required by C.G.S. § 20-327b (Disclosure). Exhibit 2.

The First Count of Dahl's Counterclaim contains the following allegations:

CT Page 9569

¶ 5 . . . Prior to executing the P S [Booth] prepared and furnished [Dahl] with the Residential Property Condition Disclosure Report (hereinafter the "Disclosure") which is required when selling a residential property.

¶ 6. The Disclosure failed to advise [Dahl] that the roofs of the house, the detached/garage apartment and the skylights leaked, that the foundation leaked and water entered and pooled in the basement when it rained, and that a portion of the electrical system, including certain switches and wiring behind the walls that were jury-rigged and not properly connected and the control panels on the first and upstairs level of the property were not properly working and were not in compliance with applicable codes, ordinances and/or regulations. Answer and Set-Off/Counterclaim, May 11, 2006, Counterclaim. First Count (Misrepresentation by Nondisclosure), ¶ 6, pp. 2-3. [105.]

Dahl then alleges that Booth knew of the alleged problems listed in paragraph 6 when he signed the Disclosure. ¶ 7. Dahl further alleges that these nondisclosures or falsifications of material facts were made to induce Dahl to purchase the property and the price thereof. Dahl then alleges he relied on Booth's misrepresentations and as result was damaged. ¶ s 7-11.

In order to establish the cause of action plead in the First Count of the Counterclaim, Dahl would have to establish that Booth's false representations in the Disclosure (1) were made as statements of fact, (2) they were untrue and Booth knew they were untrue, (3) Booth made them to induce Dahl to act on them, and,

(4) Dahl did rely on them and acted on them to his injury. Kilduff v. Adams, 219 Conn. 314, 329 (1991).

Dahl must establish these elements by a higher than the usual preponderance of the evidence standard; these factual elements must be established by clear and convincing evidence or described otherwise as clear, precise and unequivocal. Kilduff v. Adams, 219 Conn. 314, 327-29.

The evidence on whether the roofs leaked, the foundation leaked and water pooled in the basement, and the condition of the electrical system was conflicting. The parties (Booth and Dahl) were the main witnesses, and, to a slightly lesser extent, Kelly and Loomis. Kelly's testimony CT Page 9570 was consistent with Booth's. Loomis testified on behalf of Dahl.

Dahl and Loomis testified that during the relevant time in the Spring, Summer, and Fall of 2005, there was a drought. Loomis testified the first rain occurred in late October 2005. There was no evidence from a recognized governmental agency which keeps "official" weather records, e.g., the Weather Bureau. The only evidence of the drought was from Dahl and Loomis. This was contradicted by Booth.

Dahl and Loomis inspected the property to ascertain what work was needed to make it liveable. It was clear that there were water leaks coming through the two balconies. The balcony over the carport did not cause any interior leaks. The balcony on the opposite side of the house clearly had water leaking into living area on the first floor. This was obvious as there were multiple trash baskets set up to catch the leaking water. Water was in these containers. Dahl does not claim any damages for water damage caused by the balcony leaks.

Dahl claims that from the outset he was concerned that the flat rubber membrane roof might be troublesome. This was particularly so because he says there was and had been a drought for some time before he became involved with the property in May and June 2005. Also, the interior of the house had numerous water stains, i.e., a good number of the cypress ceiling boards had water stains. Many were removed and were piled near where they had been removed. It was evident that there had been extensive water leakage. Dahl had Loomis inspect the house in order for Loomis to tell Dahl what work had to be done and the cost for same. Dahl stated he used Loomis to inspect the property to determine "triage"; to determine what work needed to be done, prioritize such needs, and determine the cost. If the cost were too much, he would not have proceeded with purchase. Loomis spent considerable time at the property for this purpose.

As part of the Purchase and Sale Agreement, Booth submitted a Real Property Disclosure Report as required by C.G.S. § 20-327(b). The First Count of the Counterclaim is based on claimed deficiencies in this Disclosure. That Disclosure requires the Seller "to disclose any knowledge of any problem regarding" various listed items. Among these are (15) "BASEMENT Water/Seepage/Dampness?" (17) "ROOF leaks, problems? Explain. (9) ELECTRICAL SYSTEM problems? Explain." As to each of these topics, Booth checked the box designated "No."

Loomis had ample time to inspect the property. However, he never went on the roof of the main house or the roof of the detached garage/apartment because he didn't have a ladder with him tall enough to CT Page 9571 do so. Nor did he inspect the basement; he claimed there were no lights in the basement.

Dahl and Loomis testified about multiple conversations which occurred among Booth, Kelly, Dahl, and Loomis. Dahl and Loomis claim that in these conversations, Booth and or Kelly told them that a new roof had been installed and there was a warranty on the roof. Supposedly, Dahl and Loomis were told the new roof was installed about five years previously; the warranty was for 25 years.

An Addendum to the Purchase and Sale Agreement provided: "9. Seller will advise Buyer the name and address of the company that replaced the main house roof EPDM roof." Addendum A. Exhibit D2.

The Purchase and Sale Agreement contains the following:

We, the parties hereto, each declare that this instrument contains the entire agreement between us, subject to no understandings, conditions, or representations other than those expressly stated herein. This agreement may not be changed, modified, or amended in whole or in part except in writing, signed by the parties." Purchase and Sale Agreement, 5 of 5, ¶ 20. Exhibit D1.

The Purchase and Sale Agreement also stated: "Property is being sold `as is.'" Purchase and Sale Agreement, 2 of 5, ¶ 7. Exhibit D1.

The parties' agreement was made subject to:

(1)

(2) HOME INSPECTION

A building inspection (by a licensed home inspector reporting the dwelling to be structurally sound and its mechanical systems (including, but not limited to, plumbing, heating, central air conditioning, built-in swimming pools, and electrical) to be functioning properly . . . This contingency shall be deemed satisfied unless Purchaser gives written notice of any structural and/or defects and a copy of the inspector's report to the Seller on or before 10 days from the Date of the Acceptance of the Agreement.

CT Page 9572

Combined Contingency Addendum To Purchase And Sale Agreement, ¶ 2. Exhibit D1.

The contract Date of Acceptance was June 17, 2005. Purchase and Sale Agreement, 5 of 5, ¶ 20. Exhibit D1.

Kelly urged Dahl to have the property inspected by a licensed home inspector.

On July 1, 2005, Dahl sent Booth his "Response To Inspections and Second Deposit." In it Dahl stated: "Please be advised that we are also completed inspections." Exhibit P. 9.

The closing took place on Monday August 1, 2005. Booth did not attend. Dahl did. No points concerning the allegations of the Counterclaim's First Count came up.

Shortly thereafter, Dahl left for southeast Asia. He left Loomis in charge of the property to do the work necessary and upon which Dahl and Loomis had an agreement. Loomis claims that in late October there was a very heavy rain breaking an extended dry spell. Loomis then noticed leaks from the roof and that water was coming into the basement through the foundation. Dahl returned from Asia on or about November 15, 2005.

On 11/15/2005, Dahl sent Booth a postcard. Its contents were: "11/15 Hello Tom, Can't locate 1) the blueprints for 3-2 Bill Hill; or 2) the warranty for EPDM roof. Could please forward? — You know the address! Thanks P.S. Luv the place, but roof is leaking! Best," It appears to have been signed by Dahl. And, to the left of Dahl's apparent signature are the words, "or call me 860-536-1155." Exhibit 16.

Booth's "Luv the place, but the roof is leaking!" is the first hint that there was a problem with the property which is now the subject of Dahl's Counterclaim.

During November 2005, Dahl asked Kelly to approach Booth about postponing the February 1, 2005 due date on mortgage note.

Dahl says Booth responded to his November 15, 2005 postcard "belatedly," "in I believe January or late in December." (291.)

But, Booth wrote to Dahl on December 1, 2005. Exhibit 15.

The body of Booth's letter says:

CT Page 9573

Dear Chris

I will look for the set of plans that I had made for you. I thought you already had them.

There is no warranty for the roof. I'll give you the name of the roofing contractor I used if there were leaking problems, he's very good.

C.G. Bostwick Company

41 Francis Ave.

Hartford, CT 06106

860.523.5249

website: www.bostwickroofing.com/

I spoke with Joe today and he mentioned that you have not sold your house and asked if I was able to extend the note that's due on the 1st of February. I have used this note to collaterize another project that I'm working on that is due as of February 1. In accordance with our agreement and therefore I am unable to alter our deal.

Glad you are happy with the house and best wishes for the holidays.

Best,

/s/ Tom

Exhibit 15

Booth bought the property in 1994. Sometime thereafter, he had the roofs replaced. The new roofs were flat membrane rubber. No warranty on the roof was provided to Booth.

In 2000 and 2001, there were leaks in the main roof. Booth had C.G. Bostwick Company of Hartford fixed the leaks. At no time thereafter while Booth owned the property were there leaks.

As of June 2007, Dahl had the property on the market. Dahl's offering CT Page 9574 sale price was $998,000.

Dahl executed Residential Property Disclosure Report required by C.G.S. § 20-327(b). (Disclosure). Exhibit 12. His "disclosure" is enlightening. Regarding question 11. Electrical Systems, Dahl marked the box "No" representing he had no knowledge of any problem with the electrical system. Dahl did comment: "No serious problems. Some switches need to be replaced."

Regarding question 17, Basement Water/Seepage/Dampness, Dahl marked the "yes" box indicating he had knowledge of such a problem. In the space provided for an explanation, Dahl wrote — "from Pool Pump."

Regarding question 19, Roof Leaks, Dahl marked the "No" box representing he had no knowledge of any problems with roof leaks.

Regarding question 19, Rot and Water Damage, Dahl marked the "No" box representing he had no knowledge of any problems with water damage problems.

As of June 23, 2007, this action was pending awaiting trial.

At trial, the work Dahl claims was necessary to correct the problems with the electrical system had not been completed. In fact a claim for $9,623 for correcting the electrical system is pending in this case. Proposal Bonner Electric, Inc. Exhibit D4A.

So too, Dahl claims for corrections to the roof are pending now in the amounts of $19,925 or $28,690. That corrective work has not been done.

And again, Dahl claims in this action that the water in the basement was caused by water coming through the foundation. The work claimed to correct this has not been done. The claim for the corrective work is $10,500. Exhibit D4B. And, at trial, Dahl and Loomis maintained that Booth's claiming the water came from the pool drain was wrong. But, Dahl himself signed the property disclosure in which he states the source of the basement water as "from Pool Pump."

When questioned about his "disclosure" responses, Dahl explained that the realtor "completed the [disclosure] with me." Dahl testified he told his realtor "there were major issues that had to be resolved." Dahl told the realtor "the major issues were the same ones that [he] referred to today." Dahl testified he indicated to the realtor that these problems "were to be attended to before any closing." Dahl was asked: "When you signed it what was your understanding as to the condition that that CT Page 9575 property would be in when you closed?" Dahl answered: "Everything would be corrected." (279-80.)

Dahl signed the disclosure including its representations about the items which are the basis of his Counterclaim. But, when he began to get uncomfortable realizing his responses did not ring true and were to his detriment, he tried to "weasel out" by trying to attribute the "disclosure" he signed to Mariette, his realtor. Loomis was a key witness for Dahl. The court has not found him to be reliable. Dahl's attorney asked him questions to establish his credentials as a builder familiar residential construction. He was asked by Dahl's attorney: "Do you have any certifications or licenses from the state of Connecticut?" Loomis answered: "Yes." Q. "What are they?" Loomis answered: "home improvement and new home construction." He testified he got the new home construction license in "02 and the home improvement I got when I was like 21 years old . . . so that was 20 — over 20 years ago." (114-15.) But that testimony was untrue. On cross examination, Loomis testified he had not had a license for new home construction since September of 2003 and had not had a home improvement license since November 2004. (170-71.) Loomis' contractor licenses had lapsed well before he got involved with Dahl on this property. Based on the foregoing, and numerous other instances, Loomis was not credible.

Booth bought the property in 1994. In 1996-1997, Booth had the roof of the main house extended beyond the walls. In some places the overhang was 2 feet; in most places the overhang was 4 feet. Booth hired Bressenden to do the roof overhangs and to install a EPDM roof. Bressenden subcontracted D.A. Home Improvements to do the wall overhangs and new roof work. At some point Booth realized the roof overhangs were uneven. It developed that the trusses for the overhangs had been installed upside down. Bressenden and D.A. Home Improvements wanted to be paid $17,000 to do the corrections. Booth refused because it was their error which caused the problem. Booth sued Bressenden and D.A. Home Improvements. Bressenden fled the country so Booth never effected service on him. Booth sued D.A. Home Improvements for its incorrect installation of the overhangs; that lawsuit had nothing to do with the quality of rubber roof itself. Booth recovered in the order of from $25,000 D.A. Home Improvements. Booth then hired Dick Gunther of Old Lyme to do the corrective work including the corrections to the membrane roof in the area where the truss work had to be done over. The roof overhang project began in December 1996. Gunther completed the project in 1998. Booth never got a warranty for the roof.

In 2000 and in 2001, the roof leaked in various places. Booth hired the roofer, C.G. Bostwick Company of Hartford to repair the roof leaks. Since that time there were no roof leaks. CT Page 9576

Kelly was in the property over a hundred times during the several months he was showing the property. He never saw evidence of current roof leaks even though he was in the house many times when it was raining or had just rained.

Neither Booth or Kelly ever told Dahl or Loomis there was a warranty on the roof. Both told Dahl and or Loomis the roof had not leaked since the Bostwick repairs in 2001.

Dahl has not proved the elements of his cause of action alleged in the First Count of the Counterclaim. The court does not find that "that the roofs of the house, the detached/garage apartment and the skylights leaked, that the foundation leaked and water entered and pooled in the basement when it rained, and that a portion of the electrical system, including certain switches and wiring behind the walls that were jury-rigged and not properly connected and the control panels on the first and upstairs level of the property were not properly working and were not in compliance with applicable codes, ordinances and/or regulations."

The court does not find that (1) the statements in Booth's Disclosure were untrue and that Booth knew they were untrue, (2) that Booth made any false statements to induce Dahl to act, or (3) that Dahl relied on the statements made in Booth's Disclosure.

Having found the issues for Booth, judgment may enter on the First Count of the Counterclaim for Booth and against Dahl.

III

The allegations of the Second Count (Misrepresentation) of Dahl's Counterclaim are either quoted below or, for the sake of brevity, summarized.

5. Prior to executing the P S, [Dahl] . . . was concerned because of the lengthy drought which had preceded his interest in the Real Estate, inquired of [Booth] as to whether there had been any leaks through the roofs.

6. In response, [Booth] responded that the roof on the house (which includes the skylights) had recently been replaced; that since it was replaced it had not leaked; that there was a twenty (20) year warranty CT Page 9577 which was provided by the company which replaced the roof; that that warranty was still in effect; that [he, Booth] would provide Dahl] with the name and address of the company that replaced the roof; and that [he, Booth] would transfer the warranty to Dahl].

7. Booth also advised Dahl "that at that time a crew which he, Booth had hire to repair any deficiencies, was working on the roofs of the detached garage/apartment; that that crew had almost completed its work; and that at the Closing the roofs of the detached garage/apartment would be free of all leaks."

8. Booth's representations were false; the main roof and the skylights had in fact leaked, and did leak whenever there was a heavy rain, and Booth did not intend to, and in fact never provided Dahl with the name and address of the company that had allegedly replaced the main roof; and never assigned the warranty to him (Dahl).

9. Booth's representations that a crew was working on the roof of the detached garage/apartment and be free of leaks by the time of the closing were false, in that if any such person performed any work it was either not completed or completed properly so that the roof of the detached garage/apartment leaked after Closing whenever there was a heavy rain.

Answer and Set-off counterclaim, May 11, 2006, pp. 4-5.

Paragraphs 10 through 12 allege, in short, that Booth promised to leave "blueprints" of the property in the house for Dahl's use.

Paragraph 6 has to do with a warranty on the roof. The court finds that Booth never got a warranty for the roof. Nor did Booth ever even talk about a roof warranty with Dahl and or Loomis. Booth did not promise or represent that he would assign the "roof warranty" to Dahl. It is telling that neither Dahl or his attorney made any mention of that warranty at the August 1, 2005 closing. Nor is there evidence of the identity of the supposed warrantor. There is no evidence of the terms of the claimed warranty. There is no evidence that it was transferable. Nor is there is any evidence of what the warranty would provide (pay) in CT Page 9578 2005 approximately 8 years after the roof was installed and the warranty issued. Thus, there is no evidence of damages for this claim. Nor does the Purchase and Sale Agreement mention anything about a warranty but does provide that the Purchase and Sale Agreement contains the entire agreement of the parties. It is noteworthy that an Addendum A to Purchase and Sale Agreement does mention a very related topic: "9. Seller will advise Buyer the name and address of the company that replaced the main house EPDM roof." This Addendum A was prepared by Dahl. It is significant that there is no mention of the "warranty." Dahl's claim based on the supposed "warranty" is without merit.

In paragraphs 7 and 9, Dahl claims Booth said he Booth had a crew doing repair work on the roofs of the detached garage/apartment and that work would be completed as of the time of the closing and the roofs of the garage/apartment would be free of all leaks. Booth never said anything like what Dahl alleges in paragraph 7. Booth in fact had not hired any one to do the claimed work and no one was working on the garage/apartment roofs during the summer of 2005. Nor, did this topic come up at the closing. The claim set forth in paragraphs 7 and 9 is without merit.

In paragraphs 10-12, Dahl claims Booth promised to leave a set of blueprints at the house. Booth did leave the blueprints. There is no evidence of the contents or the completeness of the blueprints. While Dahl alleges "it would be critically important for [him] to have access to such blueprints," there is no evidence supporting this aspect of his claim. While Dahl makes a claim for many thousand dollars for his not having the blueprints, there is no credible evidence upon which the court could make any determination as to damages caused by the absence of the blueprints. And, the court notes that a written memorandum between Dahl and Loomis, either Dahl or Loomis wrote: "Blueprints from Architect — that were removed from property by Kelly w/out my permission." Exhibit D 12. Kelly is not a party to this action. And there is nothing in the evidence even remotely suggesting Booth authorized Kelly to remove the blueprints. The claim against Booth based on the missing blueprints is without merit.

Although not mentioned in his Counterclaim, Dahl testified that an item variously described as a "mirror," "like a glass partition," "a part of the wall illuminated from behind," "it was like a stained glass," had been removed from the house after the closing. Dahl said the item was there when he inspected the property the day before the closing. (217.) His attorney asked him: "Did it ever occur to you that that would be missing when you came back after the closing? Dahl answered: "No. I was appalled." (217.) CT Page 9579

The "item" is shown in Exhibit 13. It is a part of Dahl's art collection. Booth had the right to remove it under the Purchase and Sale Agreement. See Addendum B to Purchase and Salle Agreement. Exhibit D 1. It was placed against the wall on a shelf or ledge. It was not attached to the wall or held in place by an adhesive.

However, on the day before the Monday, August 1st closing, Dahl sent his attorney an e-mail complaining about damage to the property. It contained the following paragraph:

3 a large decorative art/modern painting was removed from wall near entrance hall . . . it was apparently torn off . . . had been glued to the wall w/some black tar like cement /or adhesive . . . after tearing it off, there are 4 large divits of hardened black adhesive and, worse, a GAPING HOLE IN THE WALL E-mail dated 7/31/2005 from Dahl to Warren Miller, Dahl's attorney. Exhibit 11.

This again demonstrates Dahl was hardly a reliable witness.

Having found the issues for Booth, judgment may enter on the Second Count of the Counterclaim for Booth and against Dahl.

IV

On the Complaint, the court has found that of the original $200,000 principal, $100,000 was paid on May 15, 2006.

The court has found for Booth on the Counterclaim. No other justification other than the Counterclaim has been offered for Dahl's not paying the debt. Dahl wrongfully withheld payment. Under the circumstances, Booth is entitled to interest at the statutory rate, ten percent per year.

For the period February 1 to May 14, a period of 103 days, the interest is calculated — $200,000 x .10 x 103/365 = $5,643.84

For the period May 15, 2006 to June 1, 2009, a period 1112 days, the interest is — $100,000 x .10 x 1112/365 = $30,465.75

The total interest due is $36,109.59.

CT Page 9580 Under the terms of the note, Booth is entitled to attorneys fees. Booth has expended $12,798.50 for same. The court finds that this amount is reasonable given the circumstances, indeed, the amount claimed appears modest.

The court finds the total debt, not including costs to be taxed by the clerk, to be $148,908.09 which includes principal of $100,000.00, interest of $36,109.59, and attorneys fees of $12,798.50.

The file contains an appraisal of the property dated November 27, 2007. That appraisal states the market value of the property was $840,000 as of the date of the appraisal; land $300,000 and building $540,000. Curiously, that appraisal states: "According to the Multiple Listing Service, the subject property was listed on 07/23/07 for $1,495,000. It is currently listed for $998,000." Appraisal of 3-2 Bill Hill Road, Old Lyme, CT as of November 26, 2007. Exhibit 6, p. 1 of 6.

The court will retain jurisdiction in order to set law days and to resolve any other issues which may arise.

CT Page 9581