1916 Post Rd. Assocs., LLC v. Mrs. Green's of Fairfield, Inc.

• Decision Date: 25 June 2019
• Docket Number: AC 41276
• Citation: 212 A.3d 744,191 Conn.App. 16
• Court: Connecticut Court of Appeals
• Parties: 1916 POST ROAD ASSOCIATES, LLC v. MRS. GREEN'S OF FAIRFIELD, INC., et al.

191 Conn.App. 16

212 A.3d 744

1916 POST ROAD ASSOCIATES, LLC

v.MRS. GREEN'S OF FAIRFIELD, INC., et al.

AC 41276

Appellate Court of Connecticut.

Argued February 14, 2019

Officially released June 25, 2019

Robert D. Russo, Southport, for the appellant (plaintiff).

Robert C. Hinton, Hartford, for the appellee (defendant United Natural Foods, Inc.).

DiPentima, C.J., and Prescott and Bright, Js.

DiPENTIMA, C.J.

The plaintiff, 1916 Post Road Associates, LLC, appeals from the summary judgment rendered in favor of the defendant United Natural Foods, Inc.¹ The plaintiff contends that the trial court improperly rendered summary judgment because two separate letters sent by the defendant create a genuine issue of material fact as to whether the defendant's guarantee of the terms of a commercial lease continued through an optional extension period following the expiration of the original lease term. We disagree and, accordingly, affirm the judgment of the trial court.

Viewed in the light most favorable to the plaintiff as the nonmoving party, the record reveals the following facts and procedural history. The plaintiff is the owner of real property located at 1916 Post Road in Fairfield, Connecticut. On May 24, 1996, the plaintiff entered into a fifteen year lease agreement (lease) with Sweetwater Associates, Inc. (Sweetwater), and on May 1, 1997, the lease term began.² Five months later, on November 7, 1997, Sweetwater assigned the lease to Natural Retail Group, Inc. (Natural Retail), and, on the same day, the defendant guaranteed "the payment and performance by the [a]ssignee of all of its obligations under the [l]ease and all of the obligations of the [t]enant as defined under the [l]ease effective as of the date hereof." On April 4, 1999, Natural Retail subsequently assigned its interest to Mrs. Green's of Fairfield, Inc. (Mrs. Green's); in a letter dated May 13, 1999, the defendant confirmed that its guarantee would remain in effect despite the assignment of the lease to Mrs. Green's.³

At some point during the original lease term, the shareholders of Mrs. Green's sold all interest in the business to Planet Organic Health Corp. Prior to this sale, the defendant sent a second letter, dated June 28, 2007, to the plaintiff indicating that it had "no objection to the acquisition of the shares of [Mrs. Green's] by Planet Organic Health Corp. or its affiliates ...." In addition to communicating that it had no objection to the acquisition of Mrs. Green's, the defendant also requested that the plaintiff "irrevocably waive its option to cancel the [l]ease as a result of the [a]cquisition ... without prejudice to [the plaintiff's] right to exercise such option in connection with a future transaction."⁴

Finally, the defendant stated that "neither the [a]cquisition nor the [c]ancellation [w]aiver shall in any way limit [the defendant's] obligations under the existing guarant[ee] made by [the defendant] in favor of [the plaintiff]."

On July 3, 2007, in connection with Planet Organic Health Corp.'s acquisition of Mrs. Green's, the plaintiff received a letter from Mrs. Green's with several enclosures. Among those enclosures was a notice from Mrs. Green's that it was exercising its option to extend the lease term from the original termination date through April 30, 2017.⁵ Also included were a copy of the defendant's June 28, 2007 letter to the plaintiff and lease guarantees from Planet Organic Health Corp. and Planet Organic Holding Corp. Sometime after receiving the July 3, 2007 letter from Mrs. Green's, the plaintiff consented to the acquisition of Mrs. Green's by Planet Organic Health Corp. and waived its option to cancel the lease.

During the extension period, Mrs. Green's failed to pay the rent owed for November, 2016.⁶ Thereafter, on January 5, 2017, the plaintiff served Mrs. Green's with a notice to quit the premises and, on February 15, 2017, commenced a summary process action to evict Mrs. Green's. Judgment in the summary process action was rendered in favor of the plaintiff on March 1, 2017, and Mrs. Green's was evicted on March 17, 2017. The plaintiff claims that, despite diligent efforts, it was unable to release the premises prior to the expiration of the extended lease term, April 30, 2017.

On April 24, 2017, the plaintiff commenced the present action against the defendant. The complaint alleges that the defendant is liable for the debts of Mrs. Green's pursuant to the terms of the November 7, 1997 guarantee, as confirmed by the May 13, 1999 letter. On July 31, 2017, the defendant filed an answer and special defenses, in which it admitted that it had entered into a written guarantee of the lease obligations of Mrs. Green's, but denied that it was liable for that company's debts to the plaintiff. Then, on September 20, 2017, the defendant filed a motion for summary judgment, arguing that there was no genuine issue of material fact as to whether the guarantee extended through the optional extension period beyond the original lease term and, on the basis of the language in the guarantee, the defendant could not be held liable for a breach that occurred after the expiration of the original lease term. The plaintiff filed an opposition to the defendant's motion, contending that the defendant's guarantee did apply to the optional extension period or, "[a]t the very least," there was a factual dispute as to this issue. On December 18, 2017, the court granted the defendant's motion for summary judgment.⁷ This appeal followed.

On appeal, the plaintiff claims that the trial court improperly granted the defendant's motion for summary judgment because there is a genuine issue of material fact that the defendant's guarantee continued through the optional extension period following the expiration of the original lease term. We disagree and, therefore, affirm the judgment of the trial court.

We begin by setting forth the relevant standard of review and legal principles that govern our review. "Practice Book § [17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.... In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.... The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact.... [I]ssue-finding, rather than issue-determination, is the key to the procedure.... [T]he trial court does not sit as the trier of fact when ruling on a motion for summary judgment.... [Its] function is not to decide issues of material fact, but rather to determine whether any such issues exist.... Our review of the decision to grant a motion for summary judgment is plenary.... We therefore must decide whether the court's conclusions were legally and logically correct and find support in the record." (Internal quotation marks omitted.) Cruz v. Schoenhorn , 188 Conn. App. 208, 214–15, 204 A.3d 764 (2019).

The standard of review for contract interpretation is also well established. "Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact ... [when] there is definitive contract language, the determination of what the parties intended by their ... commitments is a question of law [over which our review is plenary].... Where the language of an agreement is susceptible to more than one reasonable interpretation, however, it is ambiguous.... [T]he determination ... whether contractual language is plain and unambiguous is itself a question of law subject to plenary review." (Citations omitted; internal quotation marks omitted.) Meeker v. Mahon , 167 Conn. App. 627, 632–33, 143 A.3d 1193 (2016). "Furthermore, a presumption that the language used is definitive arises when ... the contract at issue is between sophisticated parties and is commercial in nature." (Internal quotation marks omitted.) Allstate Life Ins. Co . v. BFA Ltd. Partnership , 287 Conn. 307, 314, 948 A.2d 318 (2008). It is undisputed that the parties to this case are corporations and that the transaction was commercial in nature.

"[Guarantees] are ... distinct and essentially different contracts; they are between different parties, they may be executed at different times and by separate instruments, and the nature of the promises and the liability of the promisors differ substantially .... The contract of the guarantor is his own separate undertaking in which the principal does not join." (Internal quotation marks omitted.) JP Morgan Chase Bank, N.A. v. Winthrop Properties, LLC , 312 Conn. 662, 675–76, 94 A.3d 622 (2014) ; see also Wolthausen v. Trimpert , 93 Conn. 260, 265, 105 A. 687 (1919) ("[a] guaranty is a collateral undertaking to pay a debt or perform a duty, in case of the failure of another person, who is in the first instance liable to such payment or performance" [internal quotation marks omitted] ).

This court previously has addressed whether a guarantor of a lease can be held liable for a default that occurred during an extension period following the expiration of the original lease term. See Village Linc Corp . v. Children's Store, Inc ., 31 Conn. App. 652, 626 A.2d 813 (1993). In Village Linc Corp. , the plaintiff appealed from the trial court's denial of an application for a prejudgment remedy against defendants who had guaranteed a rental lease. Id., at 652–53, 626 A.2d 813. The trial court denied the prejudgment remedy on the ground that the plaintiff had failed to adduce sufficient evidence to show that the defendants' guarantee was intended to...