Conn. SC awards attorney fees in contract claim

HARTFORD, Conn. (Legal Newsline) - The Connecticut Supreme Court held that a defendant was properly awarded attorney fees by the trial court after prevailing in a contract action filed against her by a skilled nursing care facility.

Justice Dennis G. Eveleigh wrote the opinion for the unanimous five-judge panel. The opinion was released Jan 1.

William P. Ammon, the defendant's father, was admitted to Aaron Manor, Inc., a skilled nursing facility, on Oct. 29, 2002. He remained a resident at the facility until his death on July 24, 2003.

During most of his stay, either Medicare or private health insurance paid for his care but there was an approximately three month period where he did not have coverage and this resulted in his owing $27,340 at his death, according to the opinion.

The defendant, Janet A. Irving, assisted her father in his admission and she informed Aaron Manor that she would be the contact person for matters concerning her father's care, but that her brother, William P. Ammon Jr., would be responsible for financial matters.

According to the opinion, Irving never had her father's power of attorney nor did she ever have any legal power to handle his affairs in life or death. Her brother, William Jr., held a power of attorney for their father and he paid their father's bills from the father's bank account.

Aaron Manor filed an action against Irving in March 2006, claiming breach of contract and fraud. Irving responded with a four count counterclaim.

The case went to trial on April 8, 2008. In September 2008, the court found that Irving did not have access to her father's checking account or to any of his other resources and rendered judgment in her favor on the complaint. The court found for Aaron Manor on the counterclaims.

On Oct. 8, 2008, Irving requested attorney's fees pursuant to "§ 42-150bb and Practice Book § 11-21 for her successful defense against the complaint." The court awarded her attorney fees in the amount of $36,000 for successfully defending the case.

Aaron Manor then appealed to the Appellate Court, both on the breach of contract claim and on the award of attorney's fees. The Appellate Court affirmed the trial court on the breach of contract claim but they concluded that Irving was not entitled to attorney's fees because she was not the "personal representative" of William P. Ammon.

Irving then appealed to the state Supreme Court.

Eveleigh began his analysis by stating the relevant part of, § 42-150bb, the statute in question:

''Whenever any contract or lease entered into on or after October 1, 1979, to which a consumer is a party, provides for the attorney's fee of the commercial party to be paid by the consumer, an attorney's fee shall be awarded as a matter of law to the consumer who successfully prosecutes or defends an action or a counterclaim based upon the contract or lease. ... For the purposes of this section ... 'consumer' means the buyer, debtor, lessee or personal representative of any of them ...''

Eveleigh notes that the Appellate Court had pointed out that the general rule of law known as "the American Rule" is that attorney's fees and ordinary expenses are not allowed to the successful party unless there is a contractual or statutory exception.

"Section 42-150bb clearly authorizes," wrote Eveleigh, "an award of attorney's fees to the consumer who successfully prosecutes or defends an action or a counterclaim on a consumer contract or lease.''

"Section 42-150bb does not define the term personal representative. [Irving] asserts that because § 42- 150bb is a remedial statute designed to protect the consumer, it should be construed broadly so as to accomplish its purpose, and that, therefore, the Appellate Court improperly limited the definition of ''personal representative,'' as set forth in § 42-150bb, to a legal representative.

"In light of the particular circumstances of the present case, however, we need not conclusively resolve the scope of the term ''personal representative'' as used in § 42-150bb. The plaintiff brought its action against the defendant on the basis of allegations that she has a status under the contract that renders her legally responsible for the debt of her father - the consumer.

"Had the plaintiff prevailed on this claim, it clearly would have been entitled, under the terms of the contract, to attorney's fees. This court has previously discussed the legislative history of § 42-150bb and recognized that it was designed to provide equitable results for a consumer who successfully defended an action under a commercial contract and the commercial party who was entitled to attorney's fees.

"It would be wholly incongruous with this design to conclude that the plaintiff would be entitled to fees for successfully prosecuting the present action but that the defendant would not be entitled to fees for mounting a successful defense.

"The judgment of the Appellate Court is reversed in part as to the award of attorney's fees and the case is remanded to that court with direction to affirm the judgment of the trial court."