Brennan Associates v. Obgyn Specialty Group, P.C.
127 Conn. App. 746
Conn. App. Ct.2011Background
- Brennan Associates leases commercial space to OBGYN (later Physicians) at Trumbull Center, with a renewal option through 2007.
- OBGYN vacated in 2004; remaining rent paid through Feb. 2006; possession surrendered Apr. 17, 2006 after a notice to quit.
- Post-vacancy, defendants sought replacement tenants; lease restriction required landlord consent for assignments/subleases, with consent not to be unreasonably withheld, and use restricted to medical practice.
- In Dec. 2005, tanning-salon candidate proposed a long-term lease extension at higher rent; Brennan declined to accept; counteroffer proposed but never executed.
- Trial court held plaintiff’s failure to accept tanning-salon was a mitigation bar as of Feb. 2006 and that the plaintiff’s post-Apr. 2006 advertising was reasonable mitigation.
- Ct. reversed, holding tanning-salon proposal was not an assignment/sublease and thus mitigation allowed; cross-appeal on good-faith/fair-dealing covenant denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did plaintiff have a duty to mitigate damages after April 2006? | Brennan argues mitigation began upon termination, and tanning-salon rejection did not waive liability. | OBGYN argues rejection of tanning-salon (Dec. 2005) ended liability in Feb. 2006. | No; mitigation continues after termination; tanning-salon rejection not a waiver. |
| Was the tanning-salon proposal an assignment/sublease or a new lease? | Proposal was not an assignment/sublease; could be negotiated as a new lease. | Proposal altered lease terms beyond assignment/sublease scope; should limit mitigation. | Proposal was a new lease, not an assignment/sublease; plaintiff could negotiate with other tenants. |
| Did the plaintiff breach the implied covenant of good faith and fair dealing by withholding consent? | Withholding consent unreasonably restricts mitigation opportunities; no bad faith. | Plaintiff acted with sinister motive in withholding consent. | No breach; plaintiff acted without bad faith; cross-appeal affirmed. |
Key Cases Cited
- Danpar Associates v. Somersville Mills Sales Room, Inc., 182 Conn. 444 (Conn. 1980) (limits landlord's right to withhold reasonable mitigation; may relet to better terms)
- Warner v. Konover, 210 Conn. 150 (Conn. 1989) (duty to mitigate constrains exercise of assignment consent rights)
- Powers v. Olson, 252 Conn. 98 (Conn. 1999) (distinguishes assignment vs. sublease; conveyance limits)
- K & R Realty Associates v. Gagnon, 33 Conn. App. 815 (Conn. App. 1994) (mitigation duty where landlord terminates tenancy)
- White v. Miller, 111 Conn. 53 (Conn. 1930) (landlord generally not obliged to mitigate after lessee defaults)
- St. Paul's Flax Hill Co-operative v. Johnson, 124 Conn.App. 728 (Conn. App. 2010) (notice to quit signals termination of tenancy for damages calculation)