Commerce Park Assocs., LLC v. Robbins

• Decision Date: 22 October 2019
• Docket Number: AC 41398, (AC 41543)
• Court: Connecticut Court of Appeals
• Parties: COMMERCE PARK ASSOCIATES, LLC v. Kim ROBBINS Robbins Eye Center, P.C. v. Commerce Park Associates, LLC, et al.

193 Conn.App. 697

220 A.3d 86

COMMERCE PARK ASSOCIATES, LLC

v.Kim ROBBINS

Robbins Eye Center, P.C.

v.Commerce Park Associates, LLC, et al.

AC 41398, (AC 41543)

Appellate Court of Connecticut.

Argued March 12, 2019

Officially released October 22, 2019

James M. Moriarty, with whom, on the brief, was Aaron A. Romney, Bridgeport, for the appellant-cross appellee in AC 41398 (defendant in the first case).

Colin B. Connor, with whom were Joseph DaSilva, Jr., Norwalk and Robert D. Russo III, Southport, for the appellee-cross appellant in AC 41398 (plaintiff in the first case).

Joseph DaSilva, Jr., Norwalk, with whom were Colin B. Connor and, on the brief, Robert D. Russo III, Southport and Marc J. Grenier, Norwalk, for the appellants in AC 41543 (defendants in the second case).

James M. Moriarty, with whom, on the brief, was Aaron A. Romney, Bridgeport, for the appellee in AC 41543 (plaintiff in the second case).

Lavine, Prescott and Eveleigh, Js.

PRESCOTT, J.

The present appeals and cross appeal arise from two actions involving a commercial lease that share a nucleus of operative facts and were consolidated for trial. They raise, among other issues, whether the landlord's failure to take actions to remedy recurrent sewage backups into the leased premises occupied by an eye surgery center resulted in a constructive eviction that excused the tenant from the obligation to pay rent in accordance with the terms of the lease, and whether, as a result of the alleged inaction of the landlord and its property management company, the eye surgery center was entitled to recover compensatory damages for the loss of its use of improvements it previously had made to the premises.

In the action underlying AC 41398 (rent action), Commerce Park Associates, LLC (Commerce Park),¹ sought to recover rent it alleges it was owed by a former tenant, Kim Robbins—an ophthalmologist and the owner of Robbins Eye Center, P.C. (REC). REC had occupied the lower level of a commercial property owned by Commerce Park in Bridgeport pursuant to a commercial lease but vacated the premises prior to the lease's expiration following a series of sewage backups that flooded the premises. Robbins now appeals, and Commerce Park cross appeals, from the judgment of the trial court rendered in part in favor of Commerce Park. Robbins claims that the court improperly (1) awarded Commerce Park rent for a period of time from November, 2014, through the third full week of April, 2015, and (2) miscalculated the amount of the rent that she owed for that period. Commerce Park claims by way of cross appeal that the court improperly determined that Robbins was constructively evicted from the premises after the third full week of April, 2015, by the sewage backups, and, consequently, Commerce Park was not entitled to recover any rent from Robbins after that date. We affirm the judgment of the court with the exception of its calculation of the amount of the rent awarded to Commerce Park and, accordingly, remand for a new hearing in damages in the rent action.

In the action underlying AC 41543 (tort action), REC sued Commerce Park and its property manager, RDR Management, LLC (RDR), seeking monetary damages for economic injuries that REC suffered as a result of their failure to make necessary repairs to the premises. Commerce Park now appeals² from the judgment of the trial court rendered in part in favor of REC and awarding REC damages of $958,041.92 against Commerce Park.³ Commerce Park claims that the trial court improperly (1) awarded damages on the basis of gross negligence because (a) Connecticut common law does not recognize distinctions or degrees of negligence and (b) REC never pleaded or otherwise asserted allegations of gross negligence prior to trial; and (2) miscalculated the amount of damages awarded because the court (a) utilized an incorrect measure of damages in determining REC's losses and (b) misconstrued the length of Robbins' expected tenancy under the lease, which was an integral component of the court's calculation of damages. We agree that the court improperly included two unexercised lease extension options in determining the length of Robbins' tenancy and, accordingly, reverse the amount of damages awarded; we otherwise affirm the judgment of the court in the tort action.

The following facts, which either were stipulated by the parties⁴ or found by the trial court, and procedural history are relevant to our discussion of the parties' claims. Beginning in 1995, Robbins leased from Commerce Park increasing amounts of space in the lower level of a commercial building it owned at 4695 Main Street in Bridgeport (building). The building, which was constructed in 1964, primarily houses medical offices and is part of a complex of office buildings owned by Commerce Park. By 2014, the building's roof, foundation, and sanitary sewer system were in poor condition and in need of repair.

Although Robbins executed the original and all subsequent leases, the leased space was occupied by REC, Robbins' ophthalmological and surgical practice. REC is a domestic professional corporation with Robbins as its sole shareholder. REC paid all rents and other charges due under the operative lease and carried all required insurance policies, which, as described by the court, made REC "the de facto tenant of the leased space with whom the landlord dealt."

On August 1, 2007, Robbins executed the lease at issue in the present appeals and cross appeal. Pursuant to the lease, Robbins agreed to rent the entire lower level of the building (premises), which consisted of 20,750 square feet of space. The lease was for a fifteen year term, with the tenant, Robbins, having the option of extending the lease for two additional five year terms. The lease required Robbins to pay rent at an adjustable rate, starting at $186,750 per year and payable in monthly installments of $15,562.50.⁵ Robbins also was responsible for paying a pro rata share of the building's property taxes as additional rent.

Paragraph 23 (c) of the lease provided in relevant part: "In the event the Demised Premises shall be damaged by fire or other casualty and shall be rendered wholly or partially untenantable, then ... Landlord shall, at Landlord's own cost and expense, proceed with all reasonable dispatch to cause the damage to be repaired and in the case of partial damage, the monthly rental for any period of such repair which is not otherwise covered by Tenant's business interruption insurance shall be abated in proportion to the portion of the Demised Premises rendered untenantable ...."

Paragraph 16 (b) of the lease provided in relevant part: "[U ]nless caused by the gross negligence or willfulness of Landlord, or of Landlord's agents , Landlord shall not be responsible or liable to Tenant, or any person, firm or corporation claiming by, through, or under Tenant for, or by reason of, any defect in the Demised Premises ... or from any injury or loss or damage to person or property of Tenant, for loss of or damage to property contained in or upon the Demised Premises ... caused by or arising or resulting from pipes ... or by or from any defect in or leakage, running or overflow of water or sewerage in any part of the Demised Premises ...." (Emphasis added.)

After signing the new lease, Robbins hired a contractor to transform the premises into what the trial court found was a "state-of-the-art eye care center, complete with a surgical center with two operating rooms certified by the state for optical surgery ... a LASIK facility, and an optical shop." The remodeling was completed in December, 2009, at a cost of $1,186,267.⁶

In September, 2013, during a period of heavy rain, a downspout detached from a roof drain, which allowed water to flood into the building and inundate parts of the lower level.⁷ The flooding from above was exacerbated by groundwater that seeped in through the building's porous foundation. The water caused substantial damage to REC's equipment, materials, and work spaces. As a result of the flooding, REC was forced to suspend business completely for six weeks. Afterward, by relocating its examination rooms and a downsized version of its optical shop into portions of the premises designated for administrative offices, REC was able partially to resume operations, albeit utilizing only approximately one half of the leased premises.

For months, mold would appear at various times and locations within the premises. By the end of October, 2014, however, REC had repaired the flood damage, remediated the mold infestations, and reoccupied the remainder of the premises, including the surgical center.⁸

At other times, both before and after the major flooding incident in 2013, REC's normal operations were interrupted due to contaminated water that leaked into the premises from blocked toilets in the offices or common areas of the upper floors of the building. Patients and staff often smelled urine or other foul odors at various locations throughout the lower floor. The court found that these various smaller leaks, although certainly disruptive, never rendered the premises untenantable. Nevertheless, as the court noted, "Robbins and REC became disenchanted with RDR's and [Commerce Park's] attitude and efforts to maintain and repair the building. The periodic plumbing problems, unpleasant odors and mold blooms proved to be quite disruptive [to] the practice and eroded any goodwill remaining between Robbins and REC, on one side, and RDR and [Commerce Park], on the other." On the basis of the various problems with the premises, beginning in September, 2013, and continuing until the time REC vacated the premises on June 30, 2015, Robbins, through REC, paid only approximately one half of her monthly rental obligation under the lease.

Beginning in April, 2015, and continuing into May and June, 2015, the building's sewage system backed up, causing sewer water and waste to flood the premises. Specifically, sewage flooded the...