Levey Miller Maretz v. 595 Corporate Circle

SCHALLER, J.,

dissenting. The majority holds that the legislature’s 1994 amendment to General Statutes § 20-325a; Public Acts 1994, No. 94-240, § 3 (P.A. 94-240, § 3); affects substantive rights and, therefore, applies prospectively only. Because I conclude that the amendment was a clarification of the earlier statute and, accordingly, should be applied retrospectively, I respectfully dissent.

In Colonial Penn Ins. Co. v. Bryant, 245 Conn. 710, 714 A.2d 1209 (1998), our Supreme Court stated the guidelines for determining whether an amendment to a statute can be applied retroactively or prospectively. “Whether to apply a statute retroactively or prospec *826 tively depends upon the intent of the legislature in enacting the statute. ... In order to determine the legislative intent, we utilize well established rules of statutory construction. Our point of departure is General Statutes § 55-3, which states: No provision of the general statutes, not previously contained in the statutes of the state, which imposes any new obligation on any person or corporation, shall be construed to have retrospective effect. The obligations referred to in the statute are those of substantive law. . . . Thus, we have uniformly interpreted § 55-3 as a rule of presumed legislative intent that statutes affecting substantive rights shall apply prospectively only. . . . This presumption in favor of prospective applicability, however, may be rebutted when the legislature clearly and unequivocally expresses its intent that the legislation shall apply retrospectively. . . . Where an amendment is intended to clarify the original intent of an earlier statute, it necessarily has retroactive effect. . . . We generally look to the statutory language and the pertinent legislative history to ascertain whether the legislature intended that the amendment be given retrospective effect.” (Citations omitted; emphasis added; internal quotation marks omitted.) Id., 718-19.

Furthermore, “[statutes passed to resolve a controversy engendered by statutory ambiguity often are deemed to have a clarifying effect. . . . [I]f the amendment was enacted soon after controversies arose as to the interpretation of the original act, it is logical to regard the amendment as a legislative interpretation of the original act .... As [our Supreme Court has] noted, [o]nce litigation brought [the statutory] ambiguity to light, the legislature acted to remove any doubt about its earlier intentions.” (Citations omitted; internal quotation marks omitted.) Toise v. Rowe, 243 Conn. 623, 628-29, 707 A.2d 25 (1998).1 It is well established *827 that “the legislature is presumed to be aware of judicial interpretations of a statute . . . Caron v. Inland Wetlands & Watercourses Commission, 222 Conn. 269, 279, 610 A.2d 584 (1992).

Because the 1994 amendment, P.A. 94-240, § 3, appears to be a classic response to a judicial interpretation that the legislature deemed inappropriate, I adopt the view that the amendment was an attempt to clarify what the legislature originally intended in enacting § 20-325a. The legislative history indicates that a major purpose of the original act, Public Acts 1971, No. 378 (P.A. 378), was to protect real estate licensees and brokers.* 2 See M.R. Wachob Co. v. MBM Partnership, 232 Conn. 645, 658-60, 656 A.2d 1036 (1995). After the enactment, however, controversy arose over whether § 20-325a should be strictly or liberally construed. See New England Land Co., Ltd. v. DeMarkey, 213 Conn. 612, 623-24, 569 A.2d 1098 (1990) (listing agreement must include sale price of property); Jay Realty, Inc. v. Ahearn Development Corp., 189 Conn. 52, 54, 453 A.2d 771 (1983) (writings containing different commission rates fail to create enforceable brokerage contract); Thornton Real Estate, Inc. v. Lobdell, 184 Conn. 228, 230-31, 439 A.2d 946 (1981) (brokerage contract signed by owner’s agent unenforceable under statute as then worded); Hossan v. Hudiakoff, 178 Conn. 381, 383, 423 *828 A.2d 108 (1979) (failure to include broker’s address fatal to listing agreement); Rostenberg-Doern Co. v. Weiner, 17 Conn. App. 294, 305-307, 552 A.2d 827 (1989) (omission of broker’s rate renders listing agreement invalid); Howland v. Schweir, 7 Conn. App. 709, 713-15, 510 A.2d 215 (1986) (commission not recoverable where broker could not prove he produced buyer during effective term of listing agreement); Arruda Realty, Inc. v. Doyon, 35 Conn. Sup. 617, 619-20, 401 A.2d 625, cert. denied, 176 Conn. 763, 394 A.2d 201 (1978) (owner’s address requirement not satisfied even though listing agreement included address of subject property, which was same as owner’s address).3 “A broker who does not follow the mandate of [§ 20-325a (b)] does so at his peril.” Thornton Real Estate, Inc. v. Lobdell, supra, 230-31. Section 20-325a (b) also was interpreted in McCutcheon & Burr, Inc. v. Berman, 218 Conn. 512, 590 A.2d 438 (1991). After examining this line of cases, our Supreme Court determined that “the requirements of § 20-325a (b) are mandatory rather than permissive and that the statute is to be strictly construed.” Id., 520.

The majority points out that “[o]ur Supreme Court has consistently held over the last two decades that § 20-325a is to be strictly construed, and there has been no attempt during that time by the legislature to change that interpretation.” Contrary to the majority’s assertion, however, our Supreme Court in M.R. Wachob Co. v. MBM Partnership, supra, 232 Conn. 660-62, already has expressed the view that there have been several clarifications of § 20-325a.4 The legislature amended the *829 statute in 1984, and again in 1985, specifically to correct the misinterpretation our courts had given the statute and its amendments. Our Supreme Court stated that “the legislative history of the 1984 amendment reveals that the legislature has attempted to avoid narrow judicial constructions of the language of the statute. Indeed, the legislature altered the language of the statute in direct response to this court’s decision in Thornton Real Estate, Inc. v. Lobdell, supra, 184 Conn. 228, in which this court had held unenforceable a listing agreement that failed to satisfy the literal language of the statute. In so doing, the legislature clearly expressed its position that it did not intend the literal language of the statute necessarily to erect barriers to the recovery of otherwise valid real estate commissions.

“Finally, the legislature has stated repeatedly that the statutory requirements for listing agreements are designed to simplify and clarify the process of hiring real estate brokers.” M.R. Wachob Co. v. MBM Partnership, supra, 232 Conn. 661-62. A careful and complete reading of the entire legislative history of § 20-325a and its amendments suggests, therefore, that the enactment of the 1994 amendment was an attempt by the legislature to clarify its original intent. In all likelihood, the legislature responded to the line of decisions culminating in McCutcheon & Burr, Inc. v. Berman, supra, 218 Conn. 512, and recognized the controversy over the appropriate construction, thus enacting the 1994 amendment to eliminate any doubt that the provisions of § 20-325a should be liberally construed. It is an established principle that “[e]ven though the legislative clarification was prompted by a judicial decision that the legislature deemed mistaken, such a clarification does not constitute an invasion of judicial authority. Like legislatures, judges are fallible. The legislature has the *830 power to make evident to us that it never intended to provide a litigant with the rights that we previously-had interpreted a statute to confer. . . . Similarly, the legislature has the power to make evident to us that it did intend to provide a litigant with rights which we previously had interpreted a statute not to confer.” (Citations omitted; internal quotation marks omitted.) State v. Magnano, 204 Conn. 259, 284, 528 A.2d 760 (1987).

An examination of the legislative history of P.A. 94-240, § 3, suggests that the legislature intended that amendment to clarify the original intent of § 20-325a. Hearings before legislative committees are a recognized source of legislative history. See Mahoney v. Lensink, 213 Conn. 548, 559-60, 569 A.2d 518 (1990). During the joint committee hearings concerning P.A. 94-240, Larry Hannafin,5 director of the department of consumer protection’s real estate division, testified that “the proposed changes expand [§ 20-325a (b)] so that if a broker in a real estate transaction has substantially complied with the provisions of this chapter, or this section, the broker will be permitted to pursue their claims for payment of the licensees fees in our court system.” Conn. Joint Standing Committee Hearings, Insurance and Real Estate, 1994 Sess., p. 91. In addition, Hannafin noted that the present judicial interpretations of § 20-325a (b) have required strict compliance with the provisions of the statute, and that if there is a minor omission from the contract, the agent is barred from receiving compensation. Id. Hannafin also testified that those judicial interpretations have resulted “in unjust enrichment to various sellers of properties.” Id.

The conclusion that the 1994 amendment is to be given effect as clarifying legislation is further buttressed *831 by the presumption that the legislature intended to accomplish a reasonable and rational result. The well established principles of statutory construction “require us to construe a statute in a manner that will not thwart its intended purpose or lead to absurd results.” Turner v. Turner, 219 Conn. 703, 712, 595 A.2d 297 (1991). Since a principal purpose of the enactment of § 20-325a was to protect licensed real estate brokers, it is highly unlikely that the legislature would have enacted legislation requiring a level of strict construction so severe that it would bar causes of action to the precise group it was enacted to protect for minor variations and omissions. See M.R. Wachob Co. v. MBM Partnership, supra, 232 Conn. 658-62.

Given the retrospective application of the 1994 amendment, the affidavits filed in connection with the defendants’ summary judgment motion raise a genuine issue of material fact concerning substantial compliance with the requirements of General Statutes § 20-325a. Under these circumstances, this matter cannot properly be disposed of by summary judgment. Accordingly, I would reverse the judgment of the trial court and remand this case for a trial on the merits.

In Coldwell Banker v. Ward, Superior Court, judicial district of Waterbury, Docket No. 122435 (October 17, 1995) (15 Conn. L. Rptr. 273), the *827 trial court, McDonald, J., concluded that the 1994 amendment to § 20-325a is to be applied retroactively because it is clarifying legislation. The court stated that “[w]hen the legislature changes the wording of a statute in order to change the interpretation that the courts have been giving the statute because of an ambiguity in the statute, the amendment is a clarifying statute that should be given retroactive application.” Id., 275, citing Caron v. Inland Wetlands & Watercourses Commission, 222 Conn. 269, 279, 610 A.2d 584 (1992).

In a letter to the hearing committee on P.A. 378, James F. Carey, executive director of the state real estate commission, took the position that the bill “is intended to clearly spell out that no person but a real estate licensee is entitled to pursue the collection of a commission.” Conn. Joint Standing Committee Hearings, Insurance and Real Estate, 1971 Sess., p. 249.

Arruda Realty, Inc. v. Doyon, supra, 35 Conn. Sup. 617, appears to be the first case in which a court applied a strict construction of § 20-325a.

We note that the Supreme Court in M.R. Wachob Co. v. MBM Partnership, supra, 232 Conn. 645, did not reach the issue of whether the 1994 amendment was a clarification of General Statutes (Rev. to 1989) § 20-325a, the statute in effect at the time of the transaction in that case. The court, instead, interpreted the language of § 20-325a and applied that language accordingly.

Even if the 1994 amendment is determined not to be clarifying legislation, the liberal interpretation accorded § 20-325a by the M.R. Wachob Co. court provides an independent basis for determining that § 20-325a must be liber *829 ally construed in the present case as well. Under this liberal construction, the outcome would therefore be the same.

Our Supreme Court has noted with approval earlier testimony by Hannafin in which he stated that a clarification of § 20-325a was needed. See M.R Wachob Co. v. MBM Partnership, supra, 232 Conn. 661.