279 Conn. 90 | Conn. | 2006
Opinion
In this consolidated appeal, the Connecticut Light and Power Company (power company), as owner and landlord of waterfront property in the city of Stamford, challenges the trial court’s rulings in two separate actions involving the power company’s termination of a commercial lease agreement with Lighthouse Landings, Inc. (Lighthouse). In the first appeal, which arises out of a declaratory judgment action brought by the power company against Lighthouse, the power company claims that the trial court improperly reinstated the lease under the doctrine of equitable nonforfeiture. In the second appeal, which arises out of a civil action for damages brought by Lighthouse against the power company, the power company claims that the trial court improperly granted
The record reveals the following undisputed facts and procedural history. On November 30, 1999, the power company leased a parcel of land in Stamford to Lighthouse for the purpose of operating a high speed ferry service between Stamford and New York City. The leased parcel consisted of 3.6 acres within a larger twenty-five acre tract, also owned by the power company. Article five of the lease provided: “The Premises will be used as a ferry service terminal including, without limitation, a parking lot, ticket office, terminal and dock for Tenant’s vessels.” Article six of the lease provided in relevant part: “[The] Tenant shall diligently proceed to obtain all governmental permits, approvals, licenses and/or certificates required in connection with Tenant’s use of the Premises ....
“If Tenant has not obtained all such Permits within one hundred eighty (180) days after the date of this Lease, then Tenant shall have the right to either (i) terminate this Lease or (ii) extend the contingency period for another sixty (60) days ... if Tenant exercises its right to extend the contingency period for an additional sixty (60) days, and if Tenant has not obtained all such Permits within the additional sixty (60) days, then Landlord and Tenant shall each have the right to terminate the lease by notice given to the other party within ten (10) days after the expiration of said sixty (60) day period. In the event that either party elects to terminate this Lease in accordance with this Paragraph [six], the Lease shall terminate as of the date of such notice of termination and thereafter neither party shall have any obligations or liability hereunder, except those which arose prior to the termination date. Landlord agrees to cooperate with Tenant in connection
The 180 day period for obtaining permits described in article six began to run on November 30, 1999, and expired on May 29, 2000. When Lighthouse failed to obtain the required permits within the stipulated time, it exercised its option to extend the lease for an additional sixty days, until July 28, 2000. Lighthouse subsequently failed to obtain the permits by the end of the extended period.
Shortly thereafter, Lighthouse commenced a civil action against the power company, alleging improper termination of the lease. In its amended complaint, Lighthouse alleged, inter alia, that the power company improperly had (1) induced Lighthouse to request the sixty day extension, thereby granting the power company the right to terminate the lease at the end of the extended period if Lighthouse did not obtain all applicable governmental permits within the specified time, even though Lighthouse was not legally obligated to terminate or to extend the lease after the first 180 days, and (2) exercised its right to terminate the lease when Lighthouse failed to obtain the required permits, despite prior assurances, on which Lighthouse had relied in exercising its right to extend the lease, that it did not
On October 13, 2000, the power company filed an. action for a judgment declaring
Thereafter, Lighthouse filed an answer, six special defenses and a counterclaim in the declaratory judgment proceeding. In its fifth special defense
Following a trial to the court, the court issued a memorandum of decision dated August 28, 2002
“[Lighthouse] shall have the obligation to pay to [the power company] all rental monies due.
On January 13, 2003, the power company filed a motion seeking payment of back rent and alleging that Lighthouse had not complied with its obligation to pay
On December 4, 2003, Lighthouse subsequently filed an application for prejudgment remedy in its civil action against the power company. Lighthouse sought to secure itself with respect to rent claimed due by the power company in connection with the declaratory judgment action, attorney’s fees and costs and the nonrefundable costs Lighthouse had incurred to acquire the ferry boat. The parties subsequently appeared before the court for a hearing on several issues, including the power company’s motion for payment of back rent
On March 5, 2004, the trial court issued two memo-randa of decision. In the first memorandum, the court
In the second memorandum on March 5, the court denied the power company’s motion for payment of back rent because, in the first memorandum on that date, it had “granted to [Lighthouse] a [prejudgment remedy] equal to the unpaid rents of $393,749.96 for the period of August, 2000, to January, 2003.” The court noted that “[t]he evidence submitted during the [prejudgment remedy] application was different than the evidence [the] court relied on in issuing the August 28 . . . decision.” This new evidence included photographs and testimony regarding use of the property by the power company, evidence of the lockout by the power company and evidence that the power company had not cooperated with Lighthouse in the permitting process from August, 2000, to January, 2003.
On March 10, 2004, the power company appealed from the trial court’s judgment in the declaratory judgment action, challenging the court’s March 5, 2004 decision denying its motion for payment of back rent and the court’s August 28 decision reinstating the lease. That same day, the power company also appealed from the trial court’s judgment in the civil action, challenging the March 5, 2004 decision granting Lighthouse’s application for prejudgment remedy. On March 16, 2004, Lighthouse filed a motion to dismiss the power com
On January 10, 2005, the trial court issued articulations of its March 5, 2004 decisions.
I
On appeal, the power company claims that, in the declaratory judgment action, the trial court improperly: (1) reinstated the lease pursuant to the doctrine of equitable nonforfeiture; (2) denied its motion for payment of back rent; and (3) acted as an advocate for Lighthouse when it recommended that Lighthouse assert a defense of equitable nonforfeiture. Lighthouse disagrees with each of these claims and argues, in turn, that the power company’s appeal challenging the August 28 decision was untimely filed. We begin by addressing the timeliness of the appeal.
A
Lighthouse contends that the appeal should be dismissed, insofar as it challenges the trial court’s August 28 decision reinstating the lease, because the power company did not file its appeal until March 10, 2004, more than eighteen months later. The power company responds that the appeal should not be dismissed because the trial court’s denial of the motion for payment of back rent on March 5, 2004, constituted a material alteration of the earlier ruling, thus creating a new
Practice Book § 63-1 (a) provides in relevant part: “Unless a different time period is provided by statute, an appeal must be filed within twenty days of the date notice of the judgment or decision is given. . . .” The twenty day limitation, however, is not a “constitutionally or legislatively created condition precedent to the jurisdiction of [the appellate] court.” (Internal quotation marks omitted.) Dowling v. Slotnik, 244 Conn. 781, 788, 712 A.2d 396, cert. denied sub nom. Slotnik v. Considine, 525 U.S. 1017, 119 S. Ct. 542, 142 L. Ed. 2d 451 (1998). The court, pursuant to its supervisoiy powers over the administration of justice, “may, on its own motion or upon motion of any party . . . order that a party for good cause shown may file a late appeal . . . .” Practice Book § 60-2 (6). Because the rules are intended “to facilitate business and advance justice, they [are to] be interpreted liberally in any case where
Nevertheless, timely motions to dismiss late appeals ordinarily are granted by the court. See id., 212-14 (affirming Appellate Court’s exercise of discretion in dismissing untimely appeal). “This practice is based in part on the fact that if the untimely appeal is entertained, a delinquent appellant would obtain the benefit of the appellate process after contributing to its delay, to the detriment of others with appeals pending who have complied with the rules and have a right to have their appeals determined expeditiously. Appellees are given the right under our rules to object to the filing of a late appeal and should be given the benefit of that rule, barring unusual circumstances or unless they waive the benefit of that rule.” (Emphasis added; internal quotation marks omitted.) Id., 213. In light of these principles, we therefore must decide whether the circumstances in the present case are “sufficiently exceptional to fall within the [court’s] own limiting caveat.” Ramos v. Commissioner of Correction, 248 Conn. 52, 61, 727 A.2d 213 (1999).
We conclude that, because exceptional circumstances gave rise to the power company’s late appeal challenging the August 28 decision reinstating the lease, and because those circumstances were beyond the power company’s control, its appeal should not be dis
Furthermore, the trial court decided the motion in a highly unorthodox manner. In its March 5, 2004 memorandum, the court stated that the evidence on which it had relied in reaching its decision “was different than the evidence [the trial] court relied on in issuing the August 28 . . . decision.” (Emphasis added.) This evidence included testimony at the prejudgment remedy hearing on the power company’s use of the property, its lockout at the premises and its failure to cooperate with Lighthouse in the permitting process from August, 2000 to January, 2003. The court also stated that a key consideration in its decision on the motion for payment of back rent was its granting of the application for prejudgment remedy, which included a sum equal to the unpaid rent. The court thus relied on findings in a proceeding that Lighthouse did not commence until more than fifteen months following issuance of the August 28 decision to effect a radical change in its earlier balancing of the equities between the parties. These developments were beyond the control of, and could not have been anticipated by, the power company
B
We next consider whether the trial court properly reinstated the lease under the doctrine of equitable nonforfeiture.
The power company responds that the plain language of article six establishes that the lease was contingent on Lighthouse obtaining the applicable governmental permits. Furthermore, the lease did not require the power company to inform Lighthouse of negotiations to sell the property during its tenancy. We agree with the power company that Lighthouse was obligated either to terminate or to extend the lease after the first 180 days should it fail to obtain the required permits and approvals. We therefore conclude that the trial court improperly reinstated the lease on the grounds that it was not contingent on obtaining the required permits and that the power company wrongfully had induced Lighthouse to exercise the lease extension option.
The trial court made the following findings in its August 28 decision: “The court finds that the lease was entered into by sophisticated parties, represented by
“Article six is titled ‘Approvals’ and does not contain a pure contingency clause. It does give either party the right to terminate if permits are not obtained but each party has different termination rights. . . .
“The court finds that article six of the lease gives the tenant alone the right to terminate the lease within and at the end of the 180 day period of time if the permits were not obtained. During that same 180 day period and at the end of the 180 days, the landlord has no right to terminate the lease, even if the permits are not obtained. Article six is not a pure contingency clause. The court concludes that the lease is not contingent on obtaining the governmental permits. The failure to obtain the permits only gives either the tenant and/or the landlord, under certain circumstances, the right to cancel the lease. Only when the tenant requests an extension of an additional 60 days, do both the tenant and the landlord have the right to terminate the lease. The tenant, on May 22,2000, exercised the 60 day extension. . . . The 180 day period from November 30, 1999, ended at the conclusion of business on May 29, 2000. The 60 day extension thereafter, ended at the conclusion of business on July 28, 2000.” (Citations omitted.) The court ultimately concluded that the lease had been terminated properly in accordance with article six, but found for Lighthouse on the fifth special defense and reinstated the lease under the doctrine of equitable nonforfeiture because the power company improperly had induced Lighthouse to extend the lease.
“Our case law, however, does not set forth a test by which to determine whether contract language is sufficiently definite to warrant its review as a question of law rather than as a question of fact. It is noteworthy that, in the majority of the cases considering contract interpretation a matter of law, the disputed agreement was a commercial contract between sophisticated commercial parties with relatively equal bargaining power.” (Citations omitted; internal quotation marks omitted.) Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 495-96, 746 A.2d 1277 (2000).
The trial court in the present case found that “the lease was entered into by sophisticated parties, represented by competent counsel regarding the commercial interests of both parties, each with relatively equal bargaining power,” and concluded, with respect to article six, that “ ‘the parties meant what they said and said what they meant in language sufficiently definitive to obviate any need for deference to the trial court’s factual findings as to the parties’ intent.’ ” In their respective briefs, both parties agreed that the determination of intent as expressed in the lease is a question of law. Our review is therefore plenary.
The intent of the parties as expressed in a contract “is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction. . . . [T]he intent of the parties is to be ascertained by a fair and
As previously noted, article six provides in relevant part: “[The] Tenant shall diligently proceed to obtain all governmental permits, approvals, licenses and/or certificates required in connection with Tenant’s use of the Premises ....
“If Tenant has not obtained all such Permits within one hundred eighty days (180) days after the date of this Lease, then Tenant shall have the right to either (i) terminate this lease or (ii) extend the contingency period for another sixty (60) days . . . if Tenant exercises its right to extend the contingency period for an additional sixty (60) days, and if Tenant has not obtained all such Permits within the additional sixty (60) days, then Landlord and Tenant shall each have the right to terminate the lease by notice given to the other party within ten (10) days after the expiration of said sixty (60) day period.” (Emphasis added.)
Webster’s Third New International Dictionary defines the word “contingent” as “dependent on ... or conditioned by something else ...” and the word “either” as “the one and the other of the two . . . [or] the one or the other of the two.” Construing the language
Lighthouse argues that language stating that the tenant “shall have the right” to terminate or to extend the lease if it has not obtained the necessary permits and approvals within the first 180 days indicates that termination or extension of the lease are not the only options available to the tenant because a right is merely a power or privilege, rather than an obligation, to perform the designated act. Lighthouse thus contends that a third option of “ ‘doing nothing,’ ” or simply continuing to occupy the property, is available under the lease if the tenant has not obtained the permits and approvals within the specified time. We disagree.
Interpretation of the lease to include a third option of doing nothing would render superfluous the provision
We thus conclude that the trial court improperly reinstated the lease under the doctrine of equitable nonfor-feiture. Under the express terms of the lease, Lighthouse would have been required to terminate the lease if it had not exercised the sixty day extension. In addition, Lighthouse concedes that it needed more time to obtain the applicable permits and approvals. As a result, it cannot be said that the power company wrongfully induced Lighthouse to extend the lease, and, therefore, equitable principles do not apply.
Lighthouse also argues that interpretation of the lease to mean that only two options are available after the first 180 days if the permits and approvals have not been obtained would render superfluous the provision that follows granting either party the right to terminate the lease at the end of 240 days. Lighthouse suggests that this would be the case because a consistent inter
As previously noted, contract language must be construed according to its ordinary meaning and sensibly applied to the subject matter of the contract. See Tall-madge Bros., Inc. v. Iroquois Gas Transmission System, L.P., supra, 252 Conn. 495-96. The right of either party to terminate the lease at the end of 240 days is not a requirement, as Lighthouse suggests, because the disputed language, when construed according to its ordinary meaning, clearly implies that the parties have a choice between terminating the lease and not terminating the lease. In contrast, the “either/or” language pertaining to termination or extension of the lease at the end of 180 days is explicit and implies no third choice. Additionally, granting each party the right to terminate the lease at the end of 240 days would have no meaning if the lease automatically terminated. Had the result suggested by Lighthouse been intended, the lease would have provided that the tenant’s failure to obtain the applicable permits after 240 days would result in automatic termination of the lease.
Furthermore, the power company had no obligation under the lease to inform Lighthouse that it was negotiating with another party to sell the property because the lease expressly provided that the entire twenty-five acre parcel, which included the 3.6 acres leased to Lighthouse, would be marketed actively for redevelopment. There was no requirement that the power com
Because we conclude that the trial court improperly reinstated the lease under the doctrine of equitable nonforfeiture, we need not reach the power company’s claim that the trial court relied on the incorrect standard in granting equitable relief to Lighthouse. There is also no need to consider the power company’s remaining claims that the trial court improperly denied its motion for payment of back rent and improperly acted as an advocate for Lighthouse, each of which rests on the presumption that the lease properly was reinstated.
II
The power company claims, in the civil action brought by Lighthouse, that the trial court improperly granted the application by Lighthouse for prejudgment remedy on the grounds that (1) the power company wrongfully induced Lighthouse to exercise the sixty day extension, and (2) the losses suffered by Lighthouse were proximately caused by the power company.
The judgment in Docket No. SC 17552 is reversed and the case is remanded to the trial court with direction to render judgment for Connecticut Light and Power Company, except with respect to the motion for payment of back rent. The judgment in Docket No. SC 17553 is reversed and the case is remanded with direction to deny the application by Lighthouse Landings, Inc., for prejudgment remedy.
In this opinion the other justices concurred.
Lighthouse did not file its first permit application until July 31, 2000, three days following the expiration of the extended approval period.
Lighthouse’s amended complaint, filed on July 10, 2003, alleges in relevant part: “11. During May of 2000, [Lighthouse] discussed with [the power company] its efforts to obtain governmental approvals to operate a fast ferry service at the Leased Premises and advised [the power company] that the approvals would take some time.
“12. During those discussions, [the power company] represented that it looked forward to a long term relationship with [Lighthouse], encouraged [Lighthouse] to move forward to seek its governmental approvals, and encouraged [Lighthouse] to extend the contingency period to obtain governmental permits an additional sixty days, and [Lighthouse] extended the contingency period in light of those representations.
“13. In or about July of2000, [Lighthouse] communicated with and advised the [power company] that the governmental permitting process was taking longer than anticipated but that [Lighthouse] intended to honor the Lease and would not terminate the Lease because of any inability to obtain governmental permits.
“14. On or about July 10,2000, [Lighthouse] wrote to [the power company] regarding the issue of the governmental permits and sought its agreement that the issue had been satisfied to the extent necessary and that the Lease could not be terminated by either party because of any permit issue. . . .
“15. [The power company] acknowledged to [Lighthouse] that the Lease was still in effect and the permits issue would not be used to attempt to terminate the Lease, which [the power company] confirmed in writing by letter dated July 17, 2000. . . .
“16. On or about July 19, 2000, [Lighthouse], in reliance on [the power company’s] representations that the Lease was in force and effect and would continue to be in force regardless of any permit issues, entered into a binding contract for the purchase of a high speed ferry specifically for use for the ferry service contemplated at the Leased Premises ....
“17. On or about July 19, 2000, [Lighthouse] paid the shipbuilder an additional nonrefundable deposit ... in connection with the aforementioned contract.
“18. On or about August 3, 2000, contrary to its representations set forth above, the [power company] sent a notice to [Lighthouse] attempting to terminate the Lease pursuant to [article six] of the Lease because [Lighthouse] had not yet obtained the governmental permits.”
The operative complaint in this action is the power company’s amended complaint dated January 17, 2001.
The hearing was held to dispose of two outstanding motions filed in the consolidated action and to establish a schedule for future proceedings.
The court advised: “[Fountain Co. v. Stein, 97 Conn. 619, 118 A. 47 (1922)], says [the power company] has properly terminated the lease. [The power company] was within their rights to terminate the lease. [The power company] did not waive. [The power company] did everything in accordance with the lease terms and terminated the lease fairly, properly and . . . yet [Fountain Co.] says [that the court] can reinstate the lease on equitable grounds because it’s not fair that they rely on the technicality.”
The fifth special defense alleged as follows: “Assuming, arguendo, that the [power company] properly terminated the Lease, [Lighthouse] is entitled to reinstatement of the Lease and relief from forfeiture as a result of one or more of the following:
“1. The [power company] is not entitled to the relief sought in its complaint for the reason that the [power company] comesbefore the court with unclean hands by wrongfully inducing [Lighthouse] to grant the [power company] the right to terminate, and by wrongfully terminating the Lease after it had waived its right to do so.
“3. [Lighthouse’s] delay in the acquisition of all applicable permits within the time stated in the Lease caused no damage to the [power company].
“4. The [power company] has prevented [Lighthouse] from completing the permitting process and otherwise attempting to cure its failure to obtain all applicable permits.
“5. Given the unique nature, location and suitability of the subjectpremises as it relates to the operation of high speed ferry service from a transportation hub in Stamford, Connecticut, the termination of the Lease would result in irreparable harm and in such a hardship to [Lighthouse] as to make it unconscionable to enforce literally the conditions of the Lease.
“6. In the absence of equitable relief, [Lighthouse] will suffer a loss wholly disproportionate to the injury to the [power company], and injury suffered by the [power company] is reparable.
“7. Should the court grant the equitable relief sought by [Lighthouse], [Lighthouse] will malee the [power company] whole by using its best efforts to complete the permitting process in as timely a manner as is reasonably possible in order to initiate the operation of ferry service as contemplated in the parties’ Lease, and will otherwise continue to comply with the remaining terms of the Lease.”
The counterclaim alleged in relevant part: “4. The [power company] is in breach of its duty to cooperate with [Lighthouse] to obtain permits pursuant to Article [six] of the lease. . . .
“7. The [power company] has refused to allow [Lighthouse] to mitigate its damages by interfering with [Lighthouse’s] efforts, subsequent to [the power company’s] improper termination of the Lease, to obtain the applicable governmental permits.”
A landlord’s injury is reparable if it can “be remedied by money instead of forfeiture of the tenancy.” Fellows v. Martin, 217 Conn. 57, 69, 584 A.2d 458 (1991).
Lighthouse had ceased paying rent to the power company beginning in August, 2000, even though it claimed that the lease remained in effect.
The power company filed a motion to reargue pursuant to Practice Book § 11-12 on September 17, 2002, which the trial court denied on November 4, 2002. The power company did not challenge that ruling.
It is undisputed that the unpaid rent owed by Lighthouse to the power company for the period beginning in August, 2000, and ending in January, 2003, was $393,749.96.
The power company had filed two separate motions dated August 3, 2004, seeking articulations of the trial court’s rulings in these matters.
The power company negotiated with Strand for sale of the parcel after it had entered into the lease agreement with Lighthouse, which the power company was permitted to do under the terms of the lease.
The power company filed a motion for payment of back rent on January 13, 2003, seeking to enforce the terms of the August 28 decision, which the trial court had stated was an appealable final judgment. On March 5, 2004, the court denied the motion for payment of back rent and substantially modified the substantive terms of the underlying August 28 decision. If the motion for payment had been filed within four months of the August 28 decision, the substantial modification would have operated to open the judgment, thus creating a new appeal period. See Commissioner of Transportation v. Rocky Mountain, LLC, 277 Conn. 696, 706, 894 A.2d 259 (2006) (“we generally have deemed any action by the trial court that substantively modifies a judgment to be an opening of that judgment”); see also Union & New Haven Trust Co. v. Taft Realty Co., 123 Conn. 9, 15, 192 A. 268 (1937); Coxe v. Coxe, 2 Conn. App. 543, 547-48, 481 A.2d 86 (1984). The motion was filed, however, more than four months after the August 28 decision. Consequently, the trial court lacked jurisdiction to open that judgment. See Practice Book § 174 (a) (court lacks power to open judgment unless motion to open is filed within four months of notice of judgment).
The doctrine of equitable nonforfeiture is a defense implicating the right of possession that may be raised in a summary process proceeding, and is based on the principle that “[ejquity abhors ... a forfeiture.” (Internal quotation marks omitted.) Fellows v. Martin, 217 Conn. 57, 64-65, 584 A.2d 458 (1991). In deciding whether to grant equitable relief, the court first considers the nature of the lease violation involved. “[I]n cases of wilful or gross negligence in failing to fulfil a condition precedent of a lease, equity will never relieve. But in [a] case of mere neglect in fulfilling a condition precedent of a lease, which does npt fall within accident or mistake, equity will relieve when the delay has been slight, the loss to the lessor small, and when not to grant relief would result in such hardship to the tenant as to make it unconscionable to enforce literally the condition precedent of the lease.” Fountain Co. v. Stein, 97 Conn. 619, 626-27, 118 A. 47 (1922).
The power company’s appeal from the prejudgment remedy decision was filed timely pursuant to General Statutes § 52-2781 (a), which provides that the granting or denial of a prejudgment remedy, following a hearing, is a final judgment for the purposes of appeal. Accordingly, the timeliness of the prejudgment remedy appeal is not an issue in this case.
On remand, the trial court will be required to consider, in light of this decision, Lighthouse’s claim for damages arising from the power company’s alleged breach of lease, unfairtrade practices, intentional misrepresentation, negligent misrepresentation and breach of the duty of good faith and fair dealing.