307 White St. Realty, LLC v. Beaver Brook Grp., LLC
| Decision Date | 29 November 2022 |
| Docket Number | AC 44740 |
| Parties | 307 WHITE STREET REALTY, LLC v. BEAVER BROOK GROUP, LLC |
| Court | Connecticut Court of Appeals |
Dana M. Hrelic, Hartford, with whom were Timothy G. Ronan and Meagan A. Cauda, and, on the brief, Johanna S. Katz, Hartford, for the appellant (plaintiff).
Alexander Copp, Danbury, with whom was Neil R. Marcus, Danbury, for the appellee (defendant).
Prescott, Suarez and Clark, Js.
The present appeal arises out of an action brought by the plaintiff lessee, 307 White Street Realty, LLC, against the defendant lessor, Beaver Brook Group, LLC, to enforce an option to purchase clause in the parties’ commercial lease (lease option), which included certain concomitant contractual and statutory obligations related to the Hazardous Waste Establishment Transfer Act, General Statutes § 22a-134 et seq. (Transfer Act). The plaintiff appeals from the judgment of the trial court granting the defendant's motion to dismiss the present action as moot because, after the plaintiff commenced it, the parties executed a purchase and sale agreement regarding the leased property that purportedly supersedes the lease option with respect to the sale of the property such that the court no longer can afford any practical relief to the plaintiff by adjudicating the underlying action. The plaintiff claims on appeal that the court improperly (1) determined that the defendant's motion to dismiss implicated the court's subject matter jurisdiction, (2) failed to hold an evidentiary hearing necessary to resolve disputed material facts, and (3) concluded that the execution of the purchase and sale agreement rendered the plaintiff's action moot in its entirety. For the reasons that follow, we agree with the plaintiff that the court improperly granted the motion to dismiss, and, accordingly, we reverse the judgment of the court and remand for further proceedings.
The following facts, as alleged in the complaint or evidenced as undisputed in the record, and procedural history are relevant to our resolution of this appeal. The plaintiff is an affiliate of Winter Brothers Waste Systems (Winter Bros.), which operates a waste and recycling business in Long Island, New York. The defendant is the owner of commercial property located at 307 White Street in Danbury.
In July, 2011, the defendant leased the 307 White Street property to WWSCT, LLC, another affiliate of Winter Bros. The lease, which was modified by the parties in 2013, contains a detailed lease option that, inter alia, grants the lessee the right to purchase the leased property for $7,250,000. The lease option also contains language addressing obligations of the parties to the contract that could arise pursuant to the Transfer Act if the lease option were exercised.1 In November, 2013, WWSCT, LLC, assigned its interest in the lease to Winter Bros. Realty Holdings I, LLC. Thereafter, in October, 2017, Winter Bros. Realty Holdings I, LLC, assigned its rights under the lease to the plaintiff.
On June 28, 2016, prior to assigning the lease to the plaintiff, Winter Bros. Realty Holdings I, LLC, had provided the defendant with written notice that it was exercising its right to purchase the property in accordance with the lease option. Prior to receiving this option notice, however, the defendant, through counsel, had sent a letter to Winter Bros. Realty Holdings I, LLC, in which it disputed whether the lease option remained in effect. Moreover, after Winter Bros. Realty Holdings I, LLC, exercised the lease option, the defendant, as alleged in the complaint, "periodically disputed the effectiveness of the exercise of the [lease option] ... and, by extension, the viability of the [lease option] itself." Although Winter Bros. Realty Holdings I, LLC, and, later, the plaintiff as its assignee, were ready, willing, and able to proceed with the purchase in accordance with the lease option, the defendant ignored the plaintiff's demands to acknowledge its obligations under the lease option, including duties it may have had under the Transfer Act vis-à-vis remediation of the property.2
The plaintiff commenced the present action against the defendant in September, 2018. The complaint contains three counts. Count one sounds in both declaratory judgment and unjust enrichment.3 With respect to the former, the plaintiff seeks a declaration that, "since March of 2017, by virtue of the exercise of the [lease option], [1] the lease is and has been an executory contract for purchase and sale of the property, [2] [the plaintiff] is a vendee under that contract, and [3] the obligations of [the plaintiff] as tenant under the lease, including, without limitation, the obligation to pay rent, were (and remain) extinguished." With respect to unjust enrichment, the plaintiff alleges that, although the lease does not include any provision requiring the plaintiff to continue to pay rent after the lease option is exercised, the plaintiff has continued to pay rent and to perform other responsibilities under the lease, and, therefore, the defendant has been "unjustly enriched by receiving and retaining a benefit to which it is not legally entitled." As to the relief sought with respect to count one, the plaintiff, in addition to seeking a declaration that the defendant has been unjustly enriched, asks for restitution of all rents paid since March, 2017, and "the value of other actions performed by [the plaintiff] or its assignor since March of 2017 that fall within the lease obligations of the tenant."
Count two also seeks a declaratory judgment. Specifically, the plaintiff asks for a declaration that (1) the defendant has taken actions that amounted to an anticipatory repudiation of the lease option, (2) the plaintiff properly and timely executed the lease option, (3) the lease option remains in full force and effect, and (4) the defendant was obligated to transfer title and satisfy its Transfer Act obligations as provided for in the lease option.
Finally, count three is captioned "specific performance." Specific performance is a remedy, not an independent cause of action.4 Nonetheless, we construe count three, which incorporates by reference allegations regarding the defendant's repudiation of the lease option, as asserting a cause of action for anticipatory breach of contract for which the plaintiff seeks the equitable remedy of specific performance.
Early in the proceedings before the trial court, the parties sought and received multiple continuances of status conferences and other pretrial hearings, indicating to the court that the parties were engaged in settlement negotiations. In one such continuance, the plaintiff stated that the parties "hope to conclude a settlement agreement that contemplates closing on or about June 28, 2019." In a later request for continuance, the defendant similarly asserted that the parties were "close to settlement" and needed additional time "to finalize same."
On February 25, 2020, the defendant filed an answer and special defense to the complaint. In its special defense, the defendant alleged that the parties, during the period of continuances arising out of the parties’ apparent settlement negotiations, had entered into a purchase and sale agreement on or about March 29, 2019, that required the plaintiff to purchase and the defendant to sell the leased property for $7,250,000. Among the differences between the purchase and sale agreement and the lease option were changes to the parties’ respective Transfer Act obligations. The closing of the sale was supposed to have occurred on June 28, 2019, and, according to the defendant, it "was ready, willing, and able to convey title to the plaintiff, pursuant to the [purchase and sale agreement]." The defendant alleged, however, that "the plaintiff has refused to attend a closing of title and has failed to proffer the balance of the purchase price due and owing under the contract and has been in default thereof."5 The defendant also alleged in its special defense that the purchase and sale agreement "supersedes the [lease option] and renders the allegations of the plaintiff's complaint moot."
Sometime later, on November 20, 2020, the court issued notice that it had scheduled a remote video court trial to commence on January 27, 2021.6 On January 19, 2021, only eight days prior to the start of the trial, the defendant filed the motion to dismiss that is the subject of the present appeal and a memorandum in support of the motion. The defendant argued that the court should dismiss the present action as moot for the same reason it had asserted in its special defense. Namely, it argued that Much of the defendant's argument relied on a boilerplate merger clause in the purchase and sale agreement that stated that "[t]his [a]greement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the [p]roperty."
The following day, January 20, 2021, the plaintiff sought a continuance of the trial date to April 27, 2021, explaining that it needed "time to reorganize its presentation of evidence" because its chief trial witness had passed away on January 5, 2021, and it "require[d] time to reply to [the defendant's] motion to dismiss, which is based on a 2019 document but filed only one week before trial." The court granted the continuance to August 5, 2021, and ordered the plaintiff to respond to the motion to dismiss by February 26, 2021.
The plaintiff timely filed its memorandum in opposition to the motion to...
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