304 Conn. 738
Conn.2012Background
- Property at 2 Mashapaug Road in Union is owned by Goodhall's, Inc. since 1961 and leased to Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle, LLC (later Jerry Yost's Chrysler Motors, LLC, then David Caron Chrysler Motors, LLC).
- The lease contains an antiassignment clause prohibiting assignment without landlord's prior written consent, with consent not to be unreasonably withheld, and defines a transfer of majority interest as an assignment.
- In 1998, Caron acquired a majority interest in the tenant without Goodhall's written consent, constituting an assignment under the lease.
- Plaintiffs sued for damages related to environmental remediation and warranty claims; the trial court held there was no contract between the parties due to the defective assignment, and the Appellate Court affirmed, concluding no contract existed between Caron and Goodhall's.
- The Supreme Court reversed, holding that the trial court had found no contract between Caron and Goodhall's in his capacity as majority member of the tenant, but that the assignment breach did not void the lease; under Rumbin, the assignment is voidable, not void, and rights pass unless Goodhall's elects to terminate under the lease.
- The case was remanded for further proceedings consistent with the holding that the assignment was voidable and that the lease remains in effect unless terminated under the lease's default procedures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a breach of an antiassignment clause render a lease void or voidable? | Caron argues assignment is void; Goodhall's consent not required for enforceable lease. | Assignment breaches contract but does not automatically void the lease; landlord may terminate. | Voidable, not void. |
| Was there an enforceable lease between David Caron Chrysler Motors, LLC and Goodhall's? | Trial court erred in concluding no contract; lease extended to Caron through the tenant entity. | No enforceable contract between Caron and Goodhall's due to invalid assignment. | There was an enforceable lease between Goodhall's and the tenant entity. |
| What is the effect of the assignment on the tenancy and ongoing obligations? | Assignment in breach triggers termination or waiver issues; lease remains in effect otherwise. | Original rights under lease are terminated upon breach or termination by landlord. | Assignment remains voidable; lease rights pass unless landlord exercises termination under the lease. |
Key Cases Cited
- Rumbin v. Utica Mutual Ins. Co., 254 Conn. 259 (2000) (antiassignment provisions generally render assignments voidable, not void)
- Wesley v. Schaller Subaru, Inc., 277 Conn. 526 (2006) (assignment of motor vehicle lease rules)
- Gateway Co. v. DiNoia, 232 Conn. 223 (1995) (liability of first assignee under commercial lease after reassignment)
- Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375 (1997) (assignment of claims; statutory authority required)