Chibroski v. Landmarc Construction Services, LLC

(

STATE OF MAINE SUPERIOR COURT

CUMBERLAND, ss. CIVIL ACTION

DOCKET NO. CV-16-320

GORDON CHIBROSKI AND ROBIN )

CHIBROSKI, )

)

Plaintiffs )

)

v. ) DECISION AND JUDGMENT ::i I M Ii::: Or- ill1AtNt::

) f'..mh.or'~r.ri ~~ Clt~rk's Offtee

LANDMARC CONSTRUCTION )

SERVICES, LLC, )

)

12 :1} _.4PR 03 2D1D

Defendant. ) l~E[;EfVED

Before the Court is Gordon and Robin Chibroski's (collectively, "Plaintiffs") complaint

against Defendant for violations of the Maine Home Construction Contracts Act ("HCCA"), 10

M.R.S.A. § 1486 et seq., and the Unfair Trade Practices Act, ("UTPA"), 5 M.R.S.A. § 205-A et

seq., and for fraudulent misrepresentation or, in the alternative, fraudulent concealment. A bench

trial was held on this matter on September 28, 2017. The Court makes the following findings and

conclusions.

I. Findings of Fact

On or about January 23, 2013, Robin Chibroski ("Robin") contacted Defendant through

its President, Marc Gagnon1, to discuss entering into an agreement for construction services.

Plaintiffs' primary project involved the construction of a horse arena, but Plaintiffs also sought to

have Defendant perform renovations on Plaintiffs' home located at 81 Nash Road, Windham,

Maine. Pertinent to this lawsuit, Defendant agreed to perform work to build an accessory

apartment in Plaintiffs' home and to renovate other areas of the residence including the

basement, the garage, and a conference room. The accessory apartment was intended to be a

1

Although Mr. Gagnon has not been made a party to this suit in his individual capacity, for simplicity, he will be

referred to as "Defendant" throughout this decision. All communications and actions by Defendant were performed

through Mr. Gagnon.

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Plaintiffs-James Audiffred, Esq.

Defendant-Michael Bosse, Esq.

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rental unit. The parties agreed that work on the interior of the home would begin the week of

March 4, 2013. Throughout the discussions with Plaintiffs, Defendant reassured Plaintiffs he was

working on the building permit application for the accessory apartment.

On February 11, 2013, Defendant notified Plaintiffs that the permit application had been

submitted. That same day, Defendant emailed the town inspector and his administrative assistant

to attempt to set a meeting to discuss the permit application. After receiving no response,

Defendant emailed the inspector and the administrative assistant against on February 18, 2013.

On February 25, 2013, Defendant and Robin met with the director of Windham Code

Enforcement, Heather McNally.

On March 4, 2013, Defendant told Plaintiffs he would submit to the Town a revised

permit application to incorporate a redesigned septic system for the accessory apartment.

Defendant sent the revised application to Heather McNally on March 12, 2013. On March 13,

2013, Robin acknowledged in an email to Defendant that the permit application was still

pending. On April 29, 2013, Defendant noted to the Town administrative assistant that he was

still waiting on the accessory apartment permit. By email to Defendant dated April 30, 2013,

Heather McNally raised several concerns about the accessory apartment and advised Defendant

that although the apartment had already been constructed, it still required permits and inspections

as well as a certificate of occupancy.

The record shows the initial building permit application was received by the Town of

Windham on February 11, 2013. It was signed by Mr. Gagnon as the authorized agent of the

property owner. The permit application was never approved. The February 11 application

contains a notation stating "not permitted per Heather 10/21/14." (Pl. 's Ex. J.)

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On May 3, 2013, Plaintiffs signed a written contract with Defendant for construction of

the horse arena. The work on Plaintiffs' residence was referenced in this contract as "Changer

[sic] order #001" and valued at $3,982.00. Change order #001 was attached to the contract and

contains a breakdown of the hours of work performed on the residence between the dates of

March 7 and April 15, with a note that the only remaining item was to insulate the garage. Robin

gave Defendant a check dated April 19, 2013 in the amount of $3,982.00. The memo reads "81

Nash Road Interior Work."

On June 7, 2013, Defendant sent Plaintiffs a second change order for the insulation of the

garage and miscellaneous labor on the residence, valued at $1,069.00. After receiving this

change order, Robin questioned Defendant as to what the $3,982.00 represents and why the

garage insulation was going to cost twice what Robin expected. Defendant explained that the

$3,982.00 was the first payment for all of the interior work and that the cost of the garage

insulation included both materials and labor. Robin indicated that she understood the interior

work to be a separate invoice and did not understand why it was a part of the larger contract.

Defendant replied that Plaintiffs' project "is all one project and job number to us so the interior

work that was not part of the arena was above and beyond and I showed it as a change order to

my contract with you." (Def.'s Ex. 4.)

On August 17, 2016, Plaintiffs filed a complaint in this Court, alleging violations of the

HCCA as well as fraudulent misrepresentation or, in the alternative, fraudulent inducement. On

November 16, 2016, Plaintiffs received a notice of violation from the Town of Windham stating

Plaintiffs did not have a required building permit for their property. Plaintiffs thereafter amended

their complaint on January 30, 2017 to add a claim under tqe UTPA.

II. Discussion

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A. Home Construction Contracts Act

The HCCA states requires "[a]ny home construction contract for more than $3,000 in

materials or labor" to be in writing and signed by both the home construction contractor and the

homeowner. 10 M.R.S.A. § 1487. Both parties "must receive a copy of the executed contract

prior to any work performance. This basic contract must contain the entire agreement between

the homeowner . . . and the home construction contractor and must contain" a number of

contractual terms detailed in the statute. Id.

Plaintiffs argue that the agreement that Defendant would perform work on Plaintiffs'

residence to construct an accessory apartment falls within the purview of the HCCA. Plaintiffs

contend Defendant violated the HCCA by performing under a verbal home construction contract

for more than $3,000, rather than having a written contract incorporating the terms required by

the HCCA. See id.

Defendant counters that it is not liable under the HCCA because (1) Plaintiffs' complaint

was not timely; (2) the work was performed on a building used for commercial purposes, not a

residence; and (3) the value of the work on the accessory apartment did not reach the $3,000

threshold. Each of these arguments fails.

Defendant contends Plaintiffs' HCCA claim is barred by 10 M.R.S.A. § 1490(2), which

states: "No action may be brought for a civil violation under this subsection more than 2 years

after the date of the occurrence of the violation." This limitations period is inapplicable to the

present suit. This subsection of the HCCA refers to an action to recover a civil penalty. See id.

("Each violation of this chapter constitutes a civil violation for which a forfeiture of not less than

$100 nor more than $1000 may be adjudged."). A suit for a civil violation must be brought by

the Attorney General or other appropriate official. Legere Builders, Inc. v. Bonetti, No. CV-96­

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248, .1997 Me. Super. LEXIS 187, at *2-3 (June 13, 1997); see 17-A M.R.S.A. § 4-B(l); Cookv.

Lisbon Sch. Comm., 682 A.2d 672, 680 (Me. 1996). As such, subsection 1490(2) does not apply

to a suit brought by a private party, and its limitations period is inapplicable to this HCCA claim.

The Law Court has clearly foreclosed Defendant's argument that work on Plaintiffs'

accessory apartment was not subject to the HCCA because the apartment was to be used for

commercial purposes. Under the HCCA, a "home construction contract" is "a contract to build,

remodel or repair a residence ...." 10 M.R.S.A. §1486(4) (emphasis added). A "residence" is

defined as "a dwelling with 3 or fewer living units and garages;" however, "[b ]uildings used for

commercial or business purposes are not subject to" the HCCA. Id. §1486(5). The Law Court has

observed:

The limitation in the HCCA to three or fewer living units would appear to

contemplate that at least some of those living units might be rental units .... Thus,

residences of homeowners that include one or two rental units would qualify as a

residence under the plain meaning of the term "residence" as defined in the

HCCA.

Runnells v. Quinn, 2006 ME 7, ,r 18, 890 A.2d 713. The work performed on Plaintiffs' home,

including the accessory apartment, qualifies as work performed on a residence under the HCCA.

Finally, the work on Plaintiffs' residence exceeded the HCCA's $3,000 threshold.

Although this lawsuit has primarily focused on the work done on the accessory apartment,

Defendant also performed work on other parts of Plaintiffs' residence. Charges for all of this

work were represented on two change orders. The work on all parts of Plaintiffs' residence was

initially invoiced at $3,982.00 and later increased by $1,069.00 when the garage insulation was

invoiced. The Court finds no reason to sever the agreement to construct the accessory apartment

from the agreement to repair other parts of Plaintiffs' house; ·all of this qualifies as work "to

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build, remodel or repair a residence." 10 M.R.S.A. § 1486(4). Taken together, all of the work

performed on Plaintiffs' residence was done pursuant to an agreement for more than $3,000.

In sum, the Court finds the agreement to perform construction of Plaintiffs residence was

subject to the HCCA. Furthermore, although the change orders serve as writings memorializing

the agreement, and the change orders were part of a larger written contract to construct a horse

arena, neither the change orders nor the horse arena contract are fully compliant with the

provisions of 10 M.R.S.A. § 1487. For instance, neither the horse arena contract nor the change

orders contain a dispute resolution provision as required by section 1487(8), an addendum

pertaining to consumer protection information as required by section 1487(13), or any reference

to the Attorney General's website as required by section 1487(14). Additionally, while the

statute requires the contract to be executed "prior to any work performance," most of the work

performed on Plaintiffs' home was performed prior to the execution of the written contract. See

id. Thus, the construction work performed on Plaintiffs' residence was done in violation of the

HCCA.

Nonetheless, remedies available to Plaintiffs are limited. Plaintiffs have requested the

Court impose a civil penalty of $1,000 for each violation of the HCCA. As discussed above, this

penalty is only enforceable by the Attorney General or other qualifying representative and may

not be pursued by a private plaintiff. As pertaining to a private plaintiff, the HCCA only provides

"[a]ny violation of this chapter shall constitute prima facie evidence of a violation of the" UTPA,

so Plaintiffs many only seek relief through the UTPA. See id. § 1490(1). The applicability of the

UTPA to Plaintiffs' claim is discussed below.

B. U-rifair Trade Practices Act

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Section 213 ( 1) of the UTP A provides that a person who purchases services or property

primarily for personal, family or household purposes "and thereby suffers any loss of money or

property, real or personal, as a result of' a method or practice that violates the UTPA may bring

an action for "actual damages, restitution and for such other equitable relief, including an

injunction, as the court determines to be necessary and proper." 5 M.R.S. § 213(1). Plaintiffs

have not met their burden of proving it more likely than not that they have suffered a loss of

money or property as a result of a practice that violates the UTP A.

A successful HCCA claim merely satisfies the plaintiffs burden of production in

pursuing a UTPA claim. O&O Elec. v. Kuan, No. CV-06-166, 2007 Me. Super. LEXIS 113, at

*4 (June 13, 2007). An HCCA violation does not establish an unfair trade practice or even

generate a presumption of unfairness. Id. Plaintiffs have not established a level of unfairness or

deception necessary to constitute a violation of the UTP A. Cf Suminski v. Maine Appliance

Warehouse, 602 A.2d 1173, 1174 (Me. 1992) (although failure to honor statutory warranty may

be evidence ofUTPA violation, conduct must also be unfair or deceptive to trigger UTPA).

Further, Plaintiffs have not proven that any of their· claimed damages result from

Defendant's HCCA violation. In order to recover damages for a violation of the UTPA, the

homeowner must show a loss of money or property that results from the violation. 5 M.R.S.A. §

213(1). Here, the record does not establish that any violation of the HCCA caused Plaintiffs to

lose money or property. Plaintiffs have not demonstrated how the lack of necessary permits or

the subsequent need for further electrical work arose from Defendant's failure to use a written

contract in compliance with the HCCA. The HCCA violation itself is not a proximate cause of

Plaintiffs' claimed damages.2 Plaintiffs have not properly supported their UTPA claim and

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therefore are not entitled to the damages they seek.

C. Fraudulent misrepresentation or .fraudulent concealment

Plaintiffs' complaint also alleges a claim for fraudulent misrepresentation or, in the

alternative, fraudulent concealment. A claim of fraudulent misrepresentation requires a plaintiff

to prove:

(1) that the defendant made a false representation, (2) of a material fact, (3) with

knowledge of its falsity or in reckless disregard of whether it is true or false, (4)

for the purpose of inducing the plaintiff to act in reliance upon it, and, (5) the

plaintiff justifiably relied upon the representation as true and acted upon it to the

plaintiffs damage.

In re Boardman, 2017 ME 131, ,r 9, 166 A.3d 106 (quoting Randv. Bath Iron Works Corp., 2003

ME 122, ,r 9, 832 A.2d 771. The elements of fraudulent concealment are: '"(1) a failure to

disclose; (2) a material fact; (3) where a legal or equitable duty to disclose exists; (4) with the

intention of inducing another to act or to refrain from acting in reliance on the non-disclosure;

and (5) which is in fact relied upon to the aggrieved party's detriment."' Id. (quoting Picher v.

Roman Catholic Bishop of Portland, 2009 ME 76, ,r 30, 974 A.2d 286). Fraudulent

misrepresentation and fraudulent concealment must be proven by clear and convincing evidence.

Picher v. Roman Catholic Bishop of Portland, 2013 ME 99, ,r 2, 82 A.3d 101; Me. Eye Care

Assocs., P.A. v. Gorman, 2006 ME 15, ,r 16, 890 A.2d 707.

Plaintiffs have not proven these claims by clear and convincing evidence. In particular, as

to fraudulent misrepresentation, Plaintiffs have not pointed to the exact material fact that was

misrepresented. Moreover, to the extent the material fact is that no permit was obtained, the

record contains no evidence that Defendant ever represented to Plaintiffs that a permit had been

obtained. Defendant only told Plaintiffs he was in the process of obtaining the permit by

2

Plaintiffs' complaint also alleges Defendant breached express and implied warranties and thereby violated the

UTP A. However, Plaintiffs have not presented any evidence or meaningful argument as to the existence or breach of

a warranty. Thus, Plaintiffs have not supported a warranty-based UTPA claim.

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submitting the application and communicating with Town of Windham representatives. Ample

evidence exists that these statements were not misrepresentations and that Defendant made no

other misrepresentations. As to both claims, Plaintiffs have neither proven that Defendant

intended to induce Plaintiffs to act or refrain from acting or that Plaintiffs actually relied upon

any misrepresentation or non-disclosure by Defendant. Because these claims require clear and

convincing evidence of intent and reliance, and Plaintiffs have not presented such evidence,

these claims must fail.

IV. Conclusion

For the foregoing reasons, judgment is entered for Defendant Landmarc Construction

Services LLC. Each party is to bear its own costs and attorney's fees.

The Clerk is directed to incorporate this Judgment into the docket by reference pursuant

to Maine Rule of Civil Procedure 79(a).

Dated: --1--+-+(---.J J_/H-"-

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