Elliott v. South Isle Food Corp.

• Decision Date: 11 March 1986
• Docket Number: 3635 and 3636,Nos. 3613,s. 3613
• Court: Connecticut Court of Appeals
• Parties: E.J. ELLIOTT et al. v. SOUTH ISLE FOOD CORPORATION.

Page 147

506 A.2d 147

6 Conn.App. 373

E.J. ELLIOTT et al. v. SOUTH ISLE FOOD CORPORATION.

Nos. 3613, 3635 and 3636.

Appellate Court of Connecticut.

Argued Dec. 13, 1985.

Decided March 11, 1986.

[6 Conn.App. 374] Richard A. Johnson, Bridgeport, filed a brief, for appellant (defendant in each case).

John G. Betar, Jr., Bridgeport, filed a brief, for appellees (plaintiffs in each case).

Before DUPONT, C.J., and BORDEN and DALY, JJ.

BORDEN, Judge.

The defendant lessee appeals from three judgments rendered in favor of the plaintiff lessors in three summary process actions which were brought pursuant to General Statutes § 47a-23. These actions involve one lease for the use and occupancy of three properties. Two of these actions The principal issue in these appeals is whether the trial courts erred in failing to find that the defendant's violations under the lease were technical and that the literal enforcement of the lease would result in an inequitable forfeiture. The defendant also assigns as error in the Bridgeport cases the trial court's refusal to grant its post-trial motion to present additional evidence. In the Danbury case, the defendant assigns as error the trial court's refusal to grant its motion to vacate the judgment and to dismiss the action. We find no error.

                (the Bridgeport cases) were initiated in the Housing Session at Bridgeport in the judicial district of Fairfield, and judgments were rendered by Driscoll, J.   the other action was brought to geographical area number three at Danbury (the Danbury case), and judgment was rendered by Lavery, J
                

Certain facts, which are common to these three actions, are not in dispute. The two parcels of property which are the subject of the Bridgeport cases are located in Southport and Stratford. The property which is the subject of the Danbury case is located in Danbury. The plaintiffs are two individuals who own the Danbury and Stratford properties and lease the Southport property. The defendant is an Ohio corporation which holds certain franchise rights from Wendy's International, Inc., and presently owns and operates two Wendy's restaurants in Connecticut.

On March 5, 1983, the parties entered into a written agreement whereby the defendant leased these properties from the plaintiffs. Although separate leases were executed for each of the three sites, the agreement recites that it constitutes a "package deal." According to the agreement, a default as to a provision in any one of the leases would constitute a default as to the entire agreement, namely, all of the leases. In addition, paragraph twenty-four, which governs default, provides that the lessor may terminate the lease if the lessee fails to pay rent when due or fails to keep and perform any other covenant in the lease, provided that the lessor shall give certain notice to the lessee specifying the default. The defendant took possession of the properties pursuant to the leases and has remained in possession.

In July, 1984, the plaintiffs issued notices to quit and initiated three summary process actions against the defendant. In their complaints the plaintiffs alleged, inter alia, that the defendant had breached the following covenants in the lease: (1) the covenant to remove, within thirty days, any mechanic's liens which the defendant caused to be filed against the leasehold property; (2) the covenant to maintain insurance coverage on the leasehold property; and (3) the covenant to pay an increased rental if the defendant defaulted on its rental obligations three times during any one year period. The defendant filed an answer admitting that mechanic's liens had been filed and not removed, and that increased rent had not been paid, but denied that they received proper notice from the plaintiffs regarding the rent increase. The defendant denied that the insurance had not been paid and filed a special defense alleging that the violations of the lease are technical, that the loss to the lessors has been small, and that the hardship to the lessee from literal enforcement of the lease will be enormous and irrevocable.

In the Bridgeport cases, the parties went to trial and judgment was rendered in favor of the plaintiffs. In the Danbury case, the parties entered into a stipulation prior to trial, the terms of which constitute the primary aspects of the court's judgment for the plaintiffs which is now challenged on appeal. Because of the differences in the factual situations underlying these judgments, we discuss the cases separately.

I THE BRIDGEPORT CASES

With regard to the covenant to remove mechanic's liens, the trial court found that mechanic's liens had been filed against the The court also found that the notices to quit conformed substantially to the statutory requirements. Accordingly, the court rendered judgments for the plaintiffs to recover possession of the premises. See General Statutes § 47a-26d. Because the defendant on this appeal does not challenge the trial court's findings regarding the alleged defaults, notices of default, or notices to quit possession of the premises, the focus of this appeal concerns the equitable doctrine of forfeiture, which was the defendant's principal defense at trial.

                plaintiffs' property in the amount of either $176,000 or $250,000.   The court also found that the defendant permitted these liens to remain on the premises in violation of the terms of the lease.   With regard to the covenant to maintain insurance on the properties, the trial court found that the defendant had allowed the insurance to lapse.   The court rejected as unproven the defendant's claim that it had notified the plaintiffs regarding the continuation of insurance.   Finally, with regard to the covenant to pay increased rent, the trial court found that the rental increase had not been paid, and rejected as unsubstantiated the defendant's claim that this default was due to defects in the plaintiffs' notices regarding the increase.   In addition, the court found that the defendant did not respond to the plaintiffs' notices of default and did not claim at trial that any of the notices had not been received.   Therefore, the trial court found that pursuant to paragraph twenty-four of the lease, the plaintiff was entitled to terminate the lease and issue notices to quit possession of the premises
                

"The rule regarding equitable relief from the forefeiture of a lease is that 'in cases of wilful or gross negligence in failing to fulfil a condition precedent of a lease, equity will never relieve. But in case of mere neglect in fulfilling a condition precedent of a lease, which does not fall within accident ormistake, 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.' " (Citations omitted.) Seven Fifty Main Street Associates v. Spector, 5 Conn.App. 170, 174, 497 A.2d 96 (1985). In reviewing claims of error in the trial court's exercise of discretion in matters of equity, we give great weight to the trial court's decision. Id. "[E]very reasonable presumption should be given in favor of its correctness. Rokus v. Bridgeport, 191 Conn. 62, 72, 463 A.2d 252 (1983). The ultimate issue is whether the court...