Gateway Co. v. DiNoia, 14979

• Decision Date: 14 February 1995
• Docket Number: No. 14979,14979
• Citation: 654 A.2d 342,232 Conn. 223
• Court: Connecticut Supreme Court
• Parties: The GATEWAY COMPANY v. Lena M. DiNOIA et al.

Page 342

654 A.2d 342

232 Conn. 223

The GATEWAY COMPANY v. Lena M. DiNOIA et al.

No. 14979.

Supreme Court of Connecticut.

Argued Nov. 30, 1994.

Decided Feb. 14, 1995.

Marc J. Kurzman, Westport, for appellants (plaintiffs).

Jonathan B. Alter, with whom were Walter B. Schatz and Ann M. Siczewicz, Hartford, for appellees (named defendant et al.).

Before CALLAHAN, NORCOTT, KATZ, PALMER and MARY R. HENNESSEY, JJ.

KATZ, Associate Justice.

In this action for breach of a lease agreement, the plaintiffs, The Gateway Company (Gateway) and its successor in interest, Heyman Associates No. 1 (Heyman), appeal from the judgment of the trial court in favor of the defendants Lena DiNoia and Charles Schnier. The principal issue on appeal is whether the trial court properly concluded that the liability of an assignee under a lease assignment agreement, in which the assignee specifically has assumed the obligations of the original tenant, ceases when the lease is reassigned.

The following facts are undisputed. On June 17, 1954, Gateway, as landlord, entered into a lease agreement (Gateway lease) with W.T. Grant Company (Grant), as tenant, ¹ for a term of thirty years. The lease was extended by a supplemental agreement effective through January 31, 1985. The leased property was located at 41 Main Street in the town of New Milford. The terms of the lease required Gateway to construct a building to Grant's specifications and to make all repairs and replacements necessary during the first year of occupancy. Thereafter, the lease required the tenant to "make all repairs and replacements, both interior and exterior, which [may] be necessary to maintain [the building] in a safe and tenantable condition and in good order and repair." The lease also required the tenant to surrender the building in good order and condition. The landlord, upon termination of the lease, was responsible only for reasonable repairs necessitated by normal wear and tear. In addition, paragraph twelve of the lease gave the tenant the unrestricted right to assign the lease, but provided that "the Tenant shall not thereby be relieved of any liability hereunder." Finally, the section of the lease entitled "heirs, etc.," stated that "[t]he Lease and all of the covenants and provisions thereof shall inure to the benefit of and be binding upon the ... successors and assigns of the parties hereto."

Grant retained possession of the property until January 20, 1965, when it assigned the Gateway lease to DiNoia as part of an agreement with her to lease and occupy a different property, also located in New Milford, known as the New Milford Shopping Center. The lease between DiNoia, as landlord, and Grant, as tenant (DiNoia lease) provided that "[i]n order to induce the Tenant to execute this Lease, Landlord hereby assumes all of Tenant's obligations under that certain Lease and Lease Agreement dated June 17, 1954 between The Gateway Company ... and Tenant ... covering premises known as No. 41 Main Street, in the Town of New Milford ... and Tenant hereby assigns to Landlord all of Tenant's right, title and interest thereto.... It is understood and agreed that the assignment set forth above shall survive the termination of this Lease and Landlord's obligations under this Section ... shall continue throughout the term of said Lease and Lease Agreement dated June 17, 1954...."

On May 16, 1973, DiNoia conveyed her interest in the New Milford Shopping Center to Charles Schnier, her employer, by way of a quitclaim deed, and on April 9, 1976, both DiNoia and Schnier assigned their rights, title, interests, claims and demands in the Gateway lease, set forth in the assignment agreement between DiNoia and Grant, to The Village Green Mall, Inc. (Village Green). Shortly before the expiration of the Gateway lease in 1984, the plaintiffs inspected the leased building and found it to be in need of extensive repairs. Because the last tenant, Village Green, refused to make the repairs, and the original tenant, Grant, had gone into bankruptcy, the plaintiffs demanded that the defendants repair the building. ² After the defendants failed to do so, the plaintiffs expended $34,822.70 to install a new roof and make other repairs. The plaintiffs then commenced this action, alleging that DiNoia and Schnier, as DiNoia's employer and principal, ³ remained obligated under the assignment agreement and are therefore liable for breach of the lease for failure to repair the building.

After a trial, the court found that the defendants were not parties to the Gateway lease, and consequently concluded that they were not liable under that lease. The trial court also found that DiNoia's liability to the plaintiffs had been created by the DiNoia lease, under the terms of which she had assumed Grant's obligations under the Gateway lease, but that her liability as assignee under that lease had ended when the Gateway lease was reassigned to Village Green because there was no longer privity of estate between the parties. The court moreover rejected the argument that the plaintiffs were third party beneficiaries to the assignment agreement between DiNoia and Grant because it found that neither DiNoia nor Grant had intended to confer a benefit upon Gateway. Because it found that DiNoia was not liable to the plaintiffs, the trial court found that, a fortiori, Schnier was not liable.

The trial court also concluded that, regardless of DiNoia's liability, Schnier could not be held liable for DiNoia's conduct because the plaintiffs had failed to prove that DiNoia had been acting as Schnier's agent during the course of her dealings with Grant. As a component of its proof of agency, the plaintiffs had offered portions of DiNoia's deposition into evidence pursuant to Practice Book § 248(1)(c). ⁴ The trial court determined, however, that because the plaintiffs had failed to show that DiNoia was unavailable to testify at trial as required by Practice Book § 248(1)(d), ⁵ her deposition testimony could not be admitted into evidence.

The plaintiffs appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). The plaintiffs claim that the trial court improperly concluded that: (1) there was no contractual relationship between the plaintiffs and the defendants under the Gateway lease; (2) the defendants' liability under the Gateway lease ceased when that lease was reassigned; (3) there was no evidence that DiNoia had acted as Schnier's agent; and (4) because the plaintiffs failed to satisfy Practice Book § 248(1)(d), DiNoia's deposition testimony was inadmissible. We conclude that the trial court improperly analyzed the parties' contractual relationship and lease obligations and improperly excluded DiNoia's deposition. Accordingly, we reverse the judgment of the trial court.

I

We need first resolve the question of whether DiNoia remained liable under the assignment agreement between her and Grant after the defendants subsequently reassigned the Gateway lease to Village Green. "The scope of our appellate review depends upon the proper characterization of the rulings made by the trial court. To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous. When, however, the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record. Practice Book § 4061; United Illuminating Co. v. Groppo, 220 Conn. 749, 752, 601 A.2d 1005 (1992); Zachs v. Groppo, 207 Conn. 683, 689, 542 A.2d 1145 (1988); Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 221-22, 435 A.2d 24 (1980)." Morton Buildings, Inc. v. Bannon, 222 Conn. 49, 53, 607 A.2d 424 (1992). "[W]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law." (Internal quotation marks omitted.) Mulligan v. Rioux, 229 Conn. 716, 740, 643 A.2d 1226 (1994). In this case, the trial court refused to hear testimony concerning the intent of the parties, basing its decision exclusively upon its reading of the DiNoia lease. Under the circumstances of this case, because the trial court relied solely upon the written agreements in ascertaining the intent of the parties, the legal inferences properly to be drawn from the documents are questions of law, rather than fact. Morton Buildings, Inc. v. Bannon, supra, 222 Conn. at 53-54, 607 A.2d 424. Similarly, whether the trial court applied the proper test in deciding if a document created a third party beneficiary and whether privity of interest existed between parties are also questions of law. See, e.g., Connecticut Light & Power Co. v. Dept. of Public Utility Control, 219 Conn. 51, 62, 591 A.2d 1231 (1991) (legal effect of facts is question of law); Bria v. St. Joseph's Hospital, 153 Conn. 626, 632, 220 A.2d 29 (1966) (when surrounding circumstances are not in dispute, construction and legal effect of contract is question of law). Accordingly, our review of the trial court's ruling in regard to the defendants' liability in this case is plenary.

A

The trial court concluded that Gateway was not a third party beneficiary of the lease agreement between DiNoia and Grant and that the plaintiffs therefore were not entitled to enforce the obligations of the Gateway lease that DiNoia had assumed because there was "nothing to indicate either that DiNoia and Grant [had] intended to confer a benefit upon Gateway, or that they [had] intended to give Gateway a right to sue DiNoia." (Emphasis added.) We disagree.

A third party beneficiary may enforce a contractual obligation without being in privity ⁶ with the actual parties to the contract. See J. Calamari & J. Perillo, Contracts (3d Ed.1987) §§ 17-1 through 17-4, pp....