JAMES E. BURNS, JR. v. DAVID Y. ADLER et al., SC 19560/19561

Judicial District of Litchfield

       Home Improvement; Foreclosure; Whether General Statutes § 20-429 (f) Abrogates Judicially-Created Bad Faith Exception that Allows Home Improvement Contractor to Recover Despite Noncompliance with the Home Improvement Act; Whether Foreclosing Party Entitled to Attorney’s Fees Under § 52-249 (a).  The plaintiff contractor brought this action claiming that the defendant owed him for work he performed on the defendant’s Lakeville property.  The plaintiff sought foreclosure of a mechanic’s lien on the property and damages for breach of contract.  The trial court ruled that, while the plaintiff’s home improvement contract did not comply with the requirements of General Statutes § 20-429 (a) of the Home Improvement Act (act), the plaintiff was nonetheless entitled to recover $214,000 in damages because the defendant had invoked the act’s protections in bad faith as contemplated by Habetz v. Condon, 224 Conn. 231 (1992).  The parties then stipulated that judgment should enter in favor of the plaintiff on the mechanic’s lien claim and that no hearing was required on the terms of that judgment.  After the court rendered a judgment of foreclosure on the lien, the plaintiff moved for attorney’s fees pursuant to General Statutes § 52-249 (a).  Section 52-249 (a) provides that “[t]he plaintiff in any action of foreclosure of a mortgage or lien, upon obtaining judgment of foreclosure, when there has been a hearing as to the form of the judgment . . . . shall be allowed the same costs, including a reasonable attorney’s fee, as if there had been a hearing on an issue of fact.”   The court denied the motion for attorney’s fees, noting that there had been no hearing on the plaintiff’s claim for foreclosure.  Both the plaintiff and the defendant appealed.  The defendant claimed on appeal that the trial court improperly rendered judgment for the plaintiff under the “bad faith exception” to the rule that a home improvement contractor who has not complied with the act cannot recover against a homeowner.  He argued that the bad faith exception recognized in Habetz v. Condon was abrogated by the 1993 enactment of § 20-429 (f) of the act, which permits a contractor to recover payment for work performed as long as the contractor has complied with some of the requirements of § 20-429 (a).  The Appellate Court (158 Conn. App. 766) rejected that claim and affirmed the judgment awarding the plaintiff damages for the work he performed, refusing to disturb the trial court’s finding that the defendant had acted in bad faith in invoking the act.  With his appeal, the plaintiff claimed that the trial court wrongly denied him attorney’s fees under § 52-249 (a).  The Appellate Court disagreed, ruling that, as the plain language of § 52-249 (a) contemplates a hearing with regard to specific aspects of the foreclosure proceeding, and as no such hearing took place here, the trial court properly refused to award the plaintiff attorney’s fees on his claim for foreclosure.  The Supreme Court granted both the plaintiff and the defendant certification to appeal the Appellate Court’s judgment.  In the defendant’s appeal, the Supreme Court will consider whether § 20-429 (f) abrogates the bad faith exception recognized in Habetz v. Condon.  In the plaintiff’s appeal, the court will consider whether the Appellate Court properly affirmed the judgment denying the plaintiff’s motion for attorney’s fees under § 52-249 (a).