Access Agency, Inc. v. Second Consolidated Blimpie Connecticut Realty, Inc.
165 A.3d 174
| Conn. App. Ct. | 2017Background
- In 2000 the plaintiff (landlord) leased commercial premises to Second Consolidated Blimpie Connecticut Realty, Inc. (tenant) with a rider allowing subletting to Blimpie franchisees and requiring personal guaranties from subtenants.
- Defendant Tarascio signed a guaranty circa 2000 guaranteeing Consolidated Blimpie’s obligations under the 2000 lease (and any renewals) while the lease term continued; the guaranty did not expressly state liability for obligations under a later, new lease after expiration.
- The lease was renewed once in 2005; Consolidated Blimpie merged into KRES-CT, LLC in 2007. The original lease term expired July 31, 2010.
- In late 2010 Marshall Gebhardt bought the franchise from the prior franchisee, KRES-CT entered a December 20, 2010 agreement with the landlord (titled “Renewal of Lease Agreement”), and Gebhardt executed a guaranty for KRES-CT’s obligations under that 2010 agreement.
- KRES-CT defaulted on rent in 2011–2012; plaintiff sued Tarascio and others. Trial court found the 2010 agreement was a new lease, Gebhardt was the sole guarantor of that lease, entered judgment against KRES-CT and Gebhardt, and found Tarascio not liable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Tarascio’s 2000 guaranty continued to guarantee obligations under the 2010 lease | Tarascio’s guaranty was continuing and by its terms covered any renewal or extension and liabilities thereafter, so Tarascio remains liable for KRES‑CT’s defaults | The 2000 lease expired; the 2010 agreement was a new lease for which Gebhardt alone signed the guaranty, so Tarascio is not liable | Court held the 2010 agreement was a new lease and Tarascio did not guarantee obligations under it; judgment for Tarascio affirmed |
| Whether the trial court improperly used a letter admitted only for impeachment as substantive evidence | Letter confirming Gebhardt as new franchisee was probative that Gebhardt (not Tarascio) was guarantor of the new lease | Letter was admitted for limited impeachment but reflected other uncontested facts showing Gebhardt operated the premises | Court erred in using the letter substantively but the error was harmless because the same facts were supported by other documents |
Key Cases Cited
- JSA Financial Corp. v. Quality Kitchen Corp. of Delaware, 113 Conn. App. 52 (2009) (guaranties are contracts and interpretation focuses on parties’ intent)
- Monroe Ready Mix Concrete, Inc. v. Westcor Development Corp., 183 Conn. 348 (1981) (continuing guaranties construed by intent; duration limited by reasonableness)
- Connecticut National Bank v. Foley, 18 Conn. App. 667 (1989) (trial court may rely on guaranty language to determine intent)
- O’Hara v. Hartford Oil Heating Co., 106 Conn. 468 (1927) (evidence admitted for limited purpose cannot be used for a different substantive purpose)
- Testone v. C. R. Gibson Co., 114 Conn. App. 210 (2009) (improper admission of evidence reviewed for harmless error)
- Federal Deposit Ins. Corp. v. Carabetta, 55 Conn. App. 384 (1999) (cumulativeness of evidence relevant to harmless error analysis)