Strazza Building & Construction, Inc. v. Harris ( 2023 )

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STRAZZA BUILDING & CONSTRUCTION,
INC. v. JENNIFER G. HARRIS,
TRUSTEE, ET AL.
(SC 20660)
Robinson, C. J., and McDonald, D’Auria, Mullins and Ecker, Js.
Syllabus
The defendants H and T appealed from the trial court’s denial of their motion
for summary judgment, which was based on that court’s determination
that the doctrine of res judicata did not preclude the present lien foreclo-
sure action brought by the plaintiff, S Co. The defendants had hired S
Co. as a general contractor for renovations to a home on property
owned by T, a trust for which H served as trustee. After the defendants
terminated their contractual relationship with S Co. as a result of a
dispute, S Co. and one of its subcontractors, R Co., filed mechanic’s
liens, claiming that the defendants owed them for the renovation work.
H then brought an action against R Co. in which H sought to reduce or
discharge R Co.’s mechanic’s lien. The trial court in H’s action against
R Co. concluded that the lienable fund for S Co.’s contract with H and
T was entirely exhausted and that, as a result, R Co.’s lien was invalid.
Meanwhile, S Co. brought the present action, seeking to foreclose its
mechanic’s liens. In their motion for summary judgment in the present
action, the defendants claimed that the trial court was required to give
res judicata effect to the court’s prior decision in H’s action against R
Co. that no lienable fund existed in light of the rebuttable presumption
of privity between general contractors and subcontractors recognized
by this court in Girolametti v. Michael Horton Associates, Inc. (332
Conn. 67). In denying the defendants’ motion for summary judgment,
the trial court concluded, inter alia, that a genuine issue of material fact
existed as to whether there was sufficient privity between R Co. and S
Co. to preclude S Co. from pursuing the present action. The defendants
thereafter appealed to the Appellate Court, which upheld the trial court’s
denial of the motion for summary judgment. The Appellate Court deter-
mined, inter alia, that the presumption of privity recognized in Girola-
metti was inapplicable in a case such as the present one, in which the
property owner sought to bind the general contractor to a ruling in a
prior action between the property owner and a subcontractor. The
Appellate Court specifically determined that it would have been inequita-
ble to bind S Co., the general contractor, to a ruling in the prior action
brought by H against R Co., a subcontractor, as a clear discrepancy
existed between S Co.’s and R Co.’s interests, and, therefore, it could
not be said that R Co. had adequately represented S Co.’s interests in
the prior action. On the granting of certification, the defendants appealed
from the Appellate Court’s judgment to this court.
Held that the Appellate Court correctly concluded that the presumption of
privity recognized in Girolametti was inapplicable in the present case,
and, accordingly, this court affirmed the Appellate Court’s judgment:
The Appellate Court properly declined to apply the presumption that
this court recognized in Girolametti, namely, that, when a property
owner and a general contractor enter into a binding agreement to resolve
a dispute arising from a construction project, subcontractors are pre-
sumptively in privity with the general contractor with respect to the
preclusive effect of such agreement on subsequent litigation arising from
the project, as that presumption arises from the flow down obligation
that a general contractor owes to a subcontractor, and there is no corres-
ponding obligation owed by a subcontractor to the general contractor.
An evaluation of the factors courts consider in determining whether
privity exists for res judicata purposes led to the conclusion that it would
have been inequitable to bind S Co. to the prior decision against R Co.,
as there was a discrepancy of interests, insofar as R Co.’s monetary
interest in the litigation against R Co. was less than 12 percent of the
amount constituting S Co.’s claim against the defendants, S Co.’s counsel
was unable to cross-examine witnesses in H’s action against R Co. or
to participate beyond representing a principal of S Co. when that principal
testified in the litigation against R Co., and a general contractor should
not reasonably expect to be bound by a judgment that involves consider-
ation of only a portion of the work completed in connection with the
entire project.
Argued November 15, 2022—officially released February 21, 2023
Procedural History
Action to foreclose mechanic’s liens, and for other
relief, brought to the Superior Court in the judicial dis-
trict of Stamford-Norwalk, where the named defendant
et al. filed a counterclaim; thereafter, the court, Genuario,
J., denied the motion for summary judgment filed by the
named defendant et al., and the named defendant et al.
appealed to the Appellate Court, Moll, Alexander and
Vertefeuille, Js., which upheld the trial court’s decision,
and the named defendant et al., on the granting of certifi-
cation, appealed to this court. Affirmed.
Bruce L. Elstein, for the appellants (named defendant
et al.).
Anthony J. LaBella, with whom, on the brief, was Debo-
rah M. Garskof, for the appellee (plaintiff).
Opinion
D’AURIA, J. In Girolametti v. Michael Horton Associ-
ates, Inc., 332 Conn. 67, 87, 208 A.3d 1223 (2019), this
court held that, when a property owner and a general
contractor have resolved disputes arising from a construc-
tion project by way of binding arbitration, there arises a
rebuttable presumption that the general contractor and
its subcontractors are in privity for purposes of res judi-
cata in any subsequent litigation. In this certified appeal,
we must determine whether the Appellate Court correctly
applied Girolametti to the facts of the present case, in
which a general contractor had sued the property owner
to foreclose two mechanic’s liens it served on the owner,
claiming unpaid balances for labor and materials stem-
ming from renovations it began on the owner’s home. In
particular, we consider whether the Appellate Court
properly upheld the trial court’s denial of the property
owner’s motion for summary judgment, declining to
give preclusive effect to the findings of the trial court
in a prior action between the owner and one of the
general contractor’s subcontractors. We agree with the
Appellate Court that the presumption of privity that we
held to apply in Girolametti does not apply in the pres-
ent case, in which a property owner seeks to bind a
general contractor to a prior judgment against a subcon-
tractor. We also agree that the trial court correctly
denied the defendants’ motion for summary judgment
because there remains an issue of material fact as to
whether the doctrine of res judicata applies to the facts
of this case.
We assume familiarity with the Appellate Court’s
opinion, which contains a full recitation of the factual
and procedural history in this case. See Strazza Build-
ing & Construction, Inc. v. Harris, 207 Conn. App. 649,
652–57, 262 A.3d 996 (2021). We briefly summarize that
history as follows.
The defendant Jennifer G. Harris (Harris) serves as
trustee of the Jennifer G. Harris Revocable Trust (trust),
which owns real property located in Greenwich. The
defendants1 hired the plaintiff, Strazza Building & Con-
struction, Inc. (Strazza), to serve as a general contractor
for substantial renovations to a home located on the
property. After a dispute arose over the cost and quality
of the work that had been completed and the estimated
time remaining to complete the project, the defendants
terminated their contractual relationship with Strazza.
Strazza and two subcontractors, Robert Rozmus Plumb-
ing & Heating, Inc. (Rozmus), and Interstate & Lakeland
Lumber Corporation, then filed and served mechanic’s
liens on the defendants, claiming unpaid balances.
Strazza then brought this action to foreclose its liens,
totaling $561,155.88, alleging claims for breach of con-
tract and unjust enrichment. Id., 652.
The preclusion issue presently before us arises because
Harris, as trustee for the trust, previously initiated a
separate proceeding against Rozmus (Rozmus action),
pursuant to General Statutes § 49-35a, seeking to reduce
or discharge the mechanic’s lien filed by Rozmus. See
Harris v. Rozmus Plumbing & Heating, Inc., Superior
Court, judicial district of Stamford-Norwalk, Docket
No. CV-XX-XXXXXXX-S. A trial was held in the Rozmus
action to resolve the validity of the mechanic’s lien.
‘‘Rozmus’ mechanic’s lien claimed $97,469.86 as the
amount due to Rozmus for plumbing services and mate-
rials,’’ which the court reduced to $62,040.36. Strazza
Building & Construction, Inc. v. Harris, supra, 207
Conn. App. 653. ‘‘The court [then] determined whether
Strazza was appropriately owed funds, because Rozmus
could recover the sum it claimed to be owed only to
the extent that Strazza, as the general contractor, was
still owed money. . . . The court in the Rozmus action,
therefore, reviewed the charges that were included in
the liens held by Strazza and Rozmus and found that
Harris was entitled to credits against the liens for many
of the charges. . . . [T]he court ultimately concluded
that the total adjusted lienable fund was negative
$109,605.29. Thus, because the lienable fund for Straz-
za’s contract was entirely exhausted, the lien held by
Rozmus was invalid and ordered discharged.’’ (Citations
omitted.) Id., 653–54.
The central finding of the Rozmus action was that
no lienable fund existed. The defendants in the present
case therefore moved for summary judgment, arguing
that this court’s decision in Girolametti v. Michael Hor-
ton Associates, Inc., supra, 332 Conn. 67, required the
trial court to give res judicata effect to the trial court’s
decision in the Rozmus action that no lienable fund
existed. Strazza opposed the motion, arguing that the
doctrine of res judicata did not apply because it was
not a party to the Rozmus action and that there was
insufficient privity between it and Rozmus to preclude
it from suing to enforce its liens in the present action.
Strazza Building & Construction, Inc. v. Harris, supra,
207 Conn. App. 655.
The trial court denied the defendants’ summary judg-
ment motion, determining that, although three of the
four required elements of res judicata were met, a genu-
ine issue of material fact existed regarding whether
there was sufficient privity between Strazza and Roz-
mus to preclude Strazza from pursuing its claims against
the defendants. Id., 655–56. In addressing the privity
issue, the trial court considered, among other things,
that Strazza’s mechanic’s liens were for a substantially
greater sum than Rozmus’ lien, that Strazza was not a
party to the prior proceeding, and that Rozmus, as a
subcontractor, may not have been in a position to
defend the defendants’ allegations against Strazza, the
general contractor. Id., 656–57. After considering the
functional relationship between the parties, the trial
court ultimately concluded that a genuine issue of mate-
rial fact existed as to whether Strazza’s interests were
‘‘sufficiently represented in the Rozmus action.’’ Id., 663.
The defendants appealed2 to the Appellate Court,
which affirmed the trial court’s decision. The Appellate
Court first held that the presumption of privity that we
held to apply in Girolametti did not apply in the case
at hand because the facts ‘‘are clearly distinguishable
. . . .’’ Id., 660. Second, the Appellate Court concluded
that the trial court ‘‘correctly determined that [without
the presumption of privity] there was a genuine issue
of fact as to whether [Strazza] was in privity with Roz-
mus for the purpose of res judicata.’’ Id., 664.
We agree fully with the Appellate Court’s holding in
this case and have nothing further to add to its cogent
rationale and conclusion on the second issue. The
remainder of this opinion addresses the first issue and
provides us with the opportunity to clarify our holding
in Girolametti and to expand on the Appellate Court’s
application of that case to the present case.
This court held in Girolametti that, ‘‘when a property
owner and a general contractor enter into a binding,
unrestricted arbitration to resolve disputes arising from
a construction project, subcontractors are presump-
tively in privity with the general contractor with
respect to the preclusive effects of the arbitration on
subsequent litigation arising from the project.’’ (Empha-
sis added.) Girolametti v. Michael Horton Associates,
Inc., supra, 332 Conn. 87. Although the dispute between
Rozmus and Harris was litigated in court, rather than
through arbitration, if res judicata were to apply in the
present case, the preclusive effect would of course be
the same. See, e.g., DKN Holdings, LLC v. Faerber, 61
Cal. 4th 813, 828, 352 P.3d 378, 189 Cal. Rptr. 3d 809(2015); CDJ Builders Corp. v. Hudson Group Construc-
tion Corp., 67 App. Div. 3d 720, 722, 889 N.Y.S.2d 64(2009). The Appellate Court properly declined to apply
the presumption of privity in the present case. It rea-
soned that Girolametti concluded that ‘‘the presump-
tion of privity arises from the ‘flow down’ obligation
that a general contractor owes to a subcontractor.’’
Strazza Building & Construction, Inc. v. Harris, supra,
207 Conn. App. 662. The Appellate Court determined
that there was no basis for concluding that the presump-
tion of privity also arises in the opposite situation, that
is, when the prior adjudication is between the owner
and the subcontractor, because there is no correspond-
ing obligation owed by the subcontractor to the contrac-
tor. Id. (‘‘there is no corresponding ‘flow up’ obligation
that extends from a subcontractor to a general contrac-
tor’’). We agree.
In Girolametti, we cited decisions from several juris-
dictions that had similarly adopted a rebuttable pre-
sumption that subcontractors are in privity with general
contractors for purposes of res judicata. See Girola-
metti v. Michael Horton Associates, Inc., supra, 332
Conn. 79. We reasoned further that, without this pre-
sumption, ‘‘a property owner who fails to prevail in
arbitration against a general contractor often will be
able to relitigate its claims by simply recharacterizing
what are essentially contract claims as violations of a
subcontractor’s allegedly independent, noncontractual
duties.’’ Id., 81.
Our analysis in Girolametti focused on the fairness
of applying the doctrine of res judicata to bind subcon-
tractors to ‘‘postconstruction arbitration in which the
subcontractors did not participate.’’ Id., 82. We did not
discuss at all the effect of the opposite situation, which
the Appellate Court described as a ‘‘ ‘flow up’ ’’ obliga-
tion: the fairness of binding a general contractor to
a previous award against its subcontractor when the
general contractor was not a party to the prior pro-
ceeding.3
Establishing a presumption of privity between two
parties requires that we consider the factors courts
look to when establishing the element of privity for res
judicata purposes. ‘‘These factors include the functional
relationships between the parties, how closely their
interests are aligned, whether they share the same legal
rights, equitable considerations, the parties’ reasonable
expectations, and whether the policies and rationales
that underlie res judicata—achieving finality and repose,
promoting judicial economy, and preventing inconsis-
tent judgments—would be served. . . . [T]he crown-
ing consideration, [however, is] that the interest of the
party to be precluded must have been sufficiently repre-
sented in the prior action so that the application of [res
judicata] is not inequitable.’’ (Citations omitted; internal
quotation marks omitted.) Id., 76–77.
As the Appellate Court concluded, an evaluation of
the factors that courts consider when determining
whether privity exists for res judicata purposes leads
to the inescapable conclusion that it would be inequita-
ble in the present case to bind the general contractor
to a judgment against its subcontractor. First, a clear
discrepancy exists between the two parties’ interests.
Common sense tells us that a subcontractor’s monetary
interest in construction disputes normally will be less
than that of the general contractor. In this case, Rozmus’
monetary interest in the litigation between itself and
the defendants ‘‘was less than 12 percent of the value of
the claim of [Strazza] . . . .’’ (Internal quotation marks
omitted.) Strazza Building & Construction, Inc. v.
Harris, supra, 207 Conn. App. 664. Therefore, it cannot
be said that Rozmus adequately represented Strazza’s
interests in the prior litigation.
Additionally, as the Appellate Court emphasized, when
litigating the amount of the lienable fund in the prior
action between Rozmus and Harris, the trial court
decided issues related to many portions of the renova-
tions in which Rozmus, as a plumbing subcontractor,
was not involved. See id., 663. Compare Lathan Con-
struction Corp. v. McDaniel Grading, Inc., 695 So. 2d
354, 355 (Fla. App. 1996) (it is improper for court to
collaterally estop general contractor from litigating claims
against his subcontractor without allowing him to par-
ticipate directly in underlying action between his bond-
ing surety and subcontractor), with Associated
Construction Co. v. Camp, Dresser & McKee, Inc., 646
F. Supp. 1574, 1578 (D. Conn. 1986) (subcontractors
deemed to be in privity with general contractor, in part
because general contractor asserted claims in which
subcontractors had an interest and from which they
received payment). The trial court in the Rozmus action
decided these issues without Strazza’s counsel being
able to cross-examine witnesses or participate in the
trial beyond representing a principal of Strazza when
he testified during the proceeding. We cannot hold that
a finding of privity under these circumstances would
promote an equitable result, as ‘‘[a subcontractor]
would not have firsthand knowledge [of] or significant
involvement [in] many aspects of the required perfor-
mance of other areas of necessary performance under
the general contract.’’ (Internal quotation marks omit-
ted.) Strazza Building & Construction, Inc. v. Harris,
supra, 207 Conn. App. 664. Without an opportunity to
properly defend the entirety of a general contractor’s
work, the contractor’s interests are not sufficiently rep-
resented in a proceeding between the subcontractor
and the property owner.
Furthermore, when considering the parties’ reason-
able expectations, we cannot say that a general contrac-
tor should reasonably expect to be bound by a judgment
that considered only a portion of the work completed
on a project. As the amicus in Girolametti explained,
and we took note of, although ‘‘standard form contracts
used in the construction industry . . . make the gen-
eral contractor responsible for the work of all subcon-
tractors,’’ the opposite is not necessarily true.
Girolametti v. Michael Horton Associates, Inc., supra,
332 Conn. 78. These considerations will likely be true
in many cases in which a party attempts to bind a
general contractor to a judgment for or against a sub-
contractor. Therefore, it would be inappropriate to
apply a presumption of privity in these cases.
The judgment of the Appellate Court is affirmed.
In this opinion the other justices concurred.
1
This action originally was brought against Harris, both in her individual
capacity and as the trustee of the Jennifer G. Harris Revocable Trust, which
owns the real property at issue, as well as two junior lienholders to the
property. The junior lienholders are not participating in this appeal. See
Strazza Building & Construction, Inc. v. Harris, supra, 207 Conn. 651 n.1.
We hereinafter refer to Harris, in her individual capacity and as trustee,
as the defendants.
2
After the defendants appealed to the Appellate Court, Strazza moved to
dismiss the appeal for lack of a final judgment. The Appellate Court denied
that motion, which was the proper ruling under our existing precedents.
Specifically, this court has held that a denial of a motion based on res
judicata and/or collateral estoppel grounds is immediately appealable. See
Lighthouse Landings, Inc. v. Connecticut Light & Power Co., 300 Conn.
325, 328 n.3, 15 A.3d 601 (2011). We have justified appeals of these interlocu-
tory rulings under the second prong of State v. Curcio, 191 Conn. 27, 31,
463 A.2d 566 (1983), explaining that the defense of res judicata, as well as
the defense of collateral estoppel, ‘‘is a civil law analogue to the criminal
law’s defense of double jeopardy, because both invoke the right not to have
to go to trial on the merits.’’ Convalescent Center of Bloomfield, Inc. v.
Dept. of Income Maintenance, 208 Conn. 187, 194–95, 544 A.2d 604 (1988);
see also State v. Curcio, supra, 31 (second prong of Curcio permits appeal
of otherwise interlocutory order that ‘‘so concludes the rights of the parties
that further proceedings cannot affect them’’). In other words, this court
has held that the defenses of res judicata and collateral estoppel provide
immunity from suit. See, e.g., Blakely v. Danbury Hospital, 323 Conn. 741,
746–47, 150 A.3d 1109 (2016); see also id., 746 (‘‘the essence of the protection
of immunity from suit is an entitlement not to stand trial or face the other
burdens of litigation’’ (internal quotation marks omitted)).
Strazza does not challenge the Appellate Court’s final judgment ruling or
argue that we should reconsider any of our precedents; therefore, we have
no occasion to do so. Nevertheless, we note that federal case law, applying
the ‘‘collateral order doctrine’’—a test similar to Curcio for determining the
appealability of interlocutory orders—does not treat the denial of a motion
to dismiss or a motion for summary judgment on res judicata grounds as
an appealable ruling. See Will v. Hallock, 546 U.S. 345, 354–55, 126 S. Ct.
952, 163 L. Ed. 2d 836 (2006); see also id., 355 (‘‘[t]he judgment bar at issue
in this case [which functions in the same way as res judicata, and which is
a defense of claim preclusion and not a defense of immunity] has no claim
to greater importance than the typical defense of claim preclusion . . .
[and] an order rejecting th[is] defense . . . cries for no immediate appeal
of right as a collateral order’’); SmileDirectClub, LLC v. Battle, 4 F.4th 1274,
1283 (11th Cir. 2021) (denial of res judicata-claim preclusion defense would
not merit immediate appeal under collateral order doctrine).
Recently, our appellate courts have seen their share of interlocutory
appeals on these grounds, including many in which the judgments at issue
ultimately have been affirmed. See, e.g., Deutsche Bank AG v. Sebastian
Holdings, Inc., 331 Conn. 379, 384, 204 A.3d 664 (2019); Santorso v. Bristol
Hospital, 308 Conn. 338, 354, 358, 63 A.3d 940 (2013); Fairlake Capital,
LLC v. Lathouris, 210 Conn. App. 801, 808, 818, 271 A.3d 689, cert. denied,
343 Conn. 928, 281 A.3d 1186 (2022); Peterson v. iCare Management, LLC,
203 Conn. App. 777, 780, 794, 250 A.3d 720 (2021); State v. Bacon Construc-
tion Co., 160 Conn. App. 75, 77, 91, 124 A.3d 941, cert. denied, 319 Conn.
953, 125 A.3d 532 (2015); In re Probate Appeal of Cadle Co., 152 Conn. App.
427, 429, 445, 100 A.3d 30 (2014); Barton v. Norwalk, 131 Conn. App. 719,
733, 27 A.3d 513, cert. denied, 303 Conn. 906, 31 A.3d 1181 (2011). In an
appropriate case, in which the parties have joined issue on this question,
we might have an opportunity to consider whether res judicata and collateral
estoppel defenses properly should provide the basis for an interlocutory
appeal when a trial court has denied those defenses pretrial.
3
In response to a subpoena duces tecum, a principal of Strazza testified
at the trial of the Rozmus action with Strazza’s counsel present. However,
the trial court did not permit counsel to object to the questions posed to
the principal. In fact, the court ruled specifically that the principal was
merely a witness and that Strazza was not a party to the proceedings.
Although Rozmus’ counsel had no objections to Strazza’s counsel’s repre-
senting the principal of his client, the court ruled that any objections to the
principal’s testimony must be ‘‘made by counsel who represent parties in
[the] case.’’