Tomey Realty Co. v. Bozzuto's, Inc.
147 A.3d 166
| Conn. App. Ct. | 2016Background
- Tomey Realty leased commercial space to Southbury Food for ten years starting Sept. 1, 2007; base rent first four years was $216,000/yr and the fifth year required $216,000 plus a cumulative CPI-based increase for the prior four years.
- On May 14, 2012 (nine months into the fifth year), Southbury Food assigned the lease to Bozuto’s and Tomey and Bozuto’s executed a contemporaneous amendment replacing the lease’s annual CPI escalation (after year five) with a 2.5% fixed annual increase beginning in year six.
- The assignment’s preamble (a "whereas" clause) recited that the current annual base rent for Sept. 1, 2011–Aug. 31, 2012 was $216,000 (not mentioning the CPI cumulative increase).
- Bozuto’s paid year-six rent calculated as $216,000 plus 2.5% annually, but paid none of the disputed fifth‑year CPI cumulative increase; Tomey sued for breach seeking that increase.
- The trial court granted summary judgment for Bozuto’s, relying on the assignment recitals to conclude the fifth‑year CPI increase was not incorporated; the appellate court reversed, holding genuine issues remain about whether the CPI increase survived the assignment and amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the fifth‑year CPI cumulative rent increase remained part of the lease after the May 14, 2012 assignment and amendment | Tomey: assignment and amendment did not modify or eliminate the CPI‑based fifth‑year increase; assignee took the lease as written, and the amendment did not delete paragraph 2 of §4 | Bozuto’s: the assignment and amendment (and recitals) show the parties intended a novation/fix of rent, so the CPI increase was replaced by a fixed formula | Reversed trial court: genuine issue of material fact exists; operative provisions (lease+amendment+assignment) do not indisputably eliminate the CPI increase, and recitals cannot override operative clauses |
| Whether the assignment’s "whereas" recital can be used to alter operative rent obligations | Tomey: recital alone cannot negate operative lease provisions or the amendment’s saving clause; operative terms control | Bozuto’s: recital stating current base rent supports that the CPI increase was not in effect at assignment | Held: recital cannot override clear operative provisions; where inconsistent, operative language controls; factual dispute remains about effect of temporary concession and recitals |
| Whether parol evidence (temporary rent concession) is admissible to explain recitals or operative intent | Tomey: temporary written concession (letter) may be admissible to show the recitals were factual and to explain intent | Bozuto’s: treats concession as a verbal understanding and invokes parol evidence rule to bar extrinsic evidence | Held: dispute whether concession contradicts recitals and whether parol evidence is barred; issue for trial — parol evidence may be admissible to contradict mere factual recitals |
| Whether the assignment/amendment constituted a novation extinguishing original lease terms | Bozuto’s: argues novation created a new agreement limiting increases to 2.5% | Tomey: disputes novation — original lease terms (including §4 para 2) remain unless clearly replaced | Held: Court declined to decide novation on summary judgment; factual inquiry required to determine if later agreements were inconsistent with the original contract |
Key Cases Cited
- DeMorais v. Wisniowski, 81 Conn. App. 595 (2004) (recital/whereas clauses are explanatory and not binding unless incorporated into operative provisions)
- Weiss v. Smulders, 313 Conn. 227 (2014) (operative provisions control over inconsistent recitals; substantive terms prevail)
- Romprey v. Safeco Ins. Co. of America, 310 Conn. 304 (2013) (summary judgment standard; view facts in light most favorable to nonmoving party)
- Bristol v. Ocean State Job Lot Stores of Connecticut, Inc., 284 Conn. 1 (2007) (contract interpretation principles: intent, ordinary meaning, whole‑document construction)
- Nash v. Stevens, 144 Conn. App. 1 (2013) (definition of unambiguous contract language and objective construction)
- Flagg Energy Development Corp. v. General Motors Corp., 244 Conn. 126 (1998) (novation requires extinguishment of the original contract by a new one)
- Alarmax Distributors, Inc. v. New Canaan Alarm Co., 141 Conn. App. 319 (2013) (test for substitute contract: terms inconsistent with former contract indicate novation)