Southhaven Associates, LLC v. McMerlin, LLC
159 Conn.App. 1
Conn. App. Ct.2015Background
- Southhaven Associates (landlord) leased commercial premises to McMerlin, LLC for a ten‑year liquor‑store lease starting June 2007; Shane McMurray and Francis G. Linn each signed personal guarantees.
- McMerlin paid through March 2008, stopped paying thereafter; landlord served a notice to quit (Oct. 22, 2008) and regained possession (Oct. 28, 2008).
- Landlord sued McMerlin and the guarantors for breach of lease and guarantee; trial court found for plaintiff and entered joint and several judgment against defendants for $433,430.90 plus fees.
- Defendants asserted several special defenses including failure to mitigate damages; Linn (sole remaining appellant) argued the court erred in factual findings on mitigation and in the damages calculation.
- Trial evidence showed landlord engaged a leasing agent, marketed the space, negotiated with multiple prospects (including Moeller and others), and re‑leased the space effective October 1, 2011.
- Trial court found landlord made reasonable efforts to mitigate both before and after termination, and that, because plaintiff elected to terminate the tenancy and brought an action for breach, future rent through re‑lease date was properly part of damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did landlord fail to mitigate damages? | Landlord contends it made continuous, commercially reasonable efforts to re‑lease the premises pre‑ and post‑termination. | Linn argues landlord did not reasonably pursue or negotiate with potential tenants and thus failed to mitigate. | Trial court found landlord made reasonable efforts; appellate court held factual findings were supported and not clearly erroneous. |
| Were damages improperly calculated by including post‑termination rent through re‑lease date? | Landlord argues having elected to terminate tenancy and sue for breach, it may recover remaining rent (subject to mitigation) until property was re‑leased. | Linn argues that termination relieved him of liability for rent after surrender and he should not be liable for rent after November 2008. | Court held service of notice to quit terminated tenancy but where landlord sues for breach, future rent can be included in damages; award through Oct. 2011 (re‑lease date) was proper. |
Key Cases Cited
- Brennan Associates v. OBGYN Specialty Group, P.C., 127 Conn. App. 746 (Conn. App. 2011) (landlord’s mitigation obligations and damages measure when tenant breaches commercial lease)
- Rokalor, Inc. v. Connecticut Eating Enterprises, Inc., 18 Conn. App. 384 (Conn. App. 1989) (use of remaining lease payments in damages after landlord sues for breach)
- Wyatt Energy, Inc. v. Motiva Enterprises, LLC, 308 Conn. 719 (Conn. 2013) (deference to trial court on witness credibility and fact finding)
- Ray Weiner, LLC v. Connery, 146 Conn. App. 1 (Conn. App. 2013) (standard for reviewing factual findings)
- Meadowbrook Center, Inc. v. Buchman, 149 Conn. App. 177 (Conn. App. 2014) (clear error standard for factual findings)
- Landry v. Spitz, 102 Conn. App. 34 (Conn. App. 2007) (trial court’s discretion in determining damages)
- K & R Realty Associates v. Gagnon, 33 Conn. App. 815 (Conn. App. 1994) (discussing landlord’s remedies after tenant breach)