Lighthouse Landings Inc. v. Conn. Light

• Decision Date: 05 January 2011
• Docket Number: No. 17976.,17976.
• Citation: 300 Conn. 325,15 A.3d 601
• Parties: LIGHTHOUSE LANDINGS, INC.v.CONNECTICUT LIGHT AND POWER COMPANY.
• Court: Connecticut Supreme Court

300 Conn. 325
15 A.3d 601

LIGHTHOUSE LANDINGS, INC.
v.
CONNECTICUT LIGHT AND POWER COMPANY.

No. 17976.

Supreme Court of Connecticut.

Argued Nov. 21, 2008.Decided Jan. 5, 2011.*

[15 A.3d 604]

Giovanna Tiberii Weller, with whom were John R. Horvack, Jr., and, on the brief, Lauren J. Taylor, Waterbury, for the appellant (defendant).Scott M. Harrington, Stamford, for the appellee (plaintiff).NORCOTT, KATZ, PALMER, ZARELLA and SCHALLER, Js.^**PER CURIAM.

[300 Conn. 327] In this action involving the termination of a commercial lease agreement between the defendant, Connecticut Light and Power Company (power company), and the plaintiff, Lighthouse Landings, Inc. (Lighthouse), the power company appeals ¹ from the judgment of the trial court, which denied in part the power company's motion for summary judgment. The power company contends that (1) the trial court improperly construed this court's remand order in Connecticut Light & Power Co. v. Lighthouse Landings, Inc., 279 Conn. 90, 900 A.2d 1242 (2006) ( Lighthouse Landings ), (2) Lighthouse's three remaining claims alleging intentional misrepresentation, negligent misrepresentation and violation of the Connecticut Unfair Trade Practices Act (CUTPA) ² are barred by the doctrine[300 Conn. 328] of collateral estoppel because the issues underlying those claims were fully and fairly litigated and finally decided against Lighthouse in Lighthouse Landings,³ and (3) our reasoning in Lighthouse Landings precludes Lighthouse from proving the essential elements of its damages claims. In the alternative, the power company contends that the trial court's decision in the declaratory judgment action precludes consideration of the misrepresentation and CUTPA claims in the present action under the doctrine of res judicata. Lighthouse responds that (1) the trial court properly construed the remand order in Lighthouse Landings, (2) the misrepresentation and CUTPA claims are not estopped because they are predicated on conduct by the power company that occurred after Lighthouse exercised its lease extension option, and (3) our reasoning in Lighthouse Landings does not preclude Lighthouse from proving the essential elements of its damages claims. Lighthouse further argues that the doctrine of res judicata does not apply because the misrepresentation and CUTPA claims were not fully litigated and decided by the trial court in the declaratory judgment action. We conclude that the trial court properly construed this court's remand

[15 A.3d 605]

order in Lighthouse Landings and that our decision in that case has no preclusive effect on Lighthouse's misrepresentation and CUTPA claims. We also conclude, however, that the trial court's decision in the declaratory judgment action bars further litigation of those claims. Accordingly, we reverse the judgment of the trial court on the summary judgment motion [300 Conn. 329] with respect to the misrepresentation and CUTPA claims.

I

The following facts and procedural history, much of which are set forth in our opinion in Lighthouse Landings, are relevant to our resolution of this appeal. “On November 30, 1999, the power company leased a parcel of land in the city of Stamford to Lighthouse for the purpose of operating a high speed ferry service between Stamford and New York City. The leased parcel consisted of 3.6 acres within a larger twenty-five acre tract, also owned by the power company. Article five of the lease provided: ‘The [p]remises will be used as a ferry service terminal including, without limitation, a parking lot, ticket office, terminal and dock for [t]enant's vessels.’ Article six of the lease provided in relevant part: ‘[The] [t]enant shall diligently proceed to obtain all governmental permits, approvals, licenses and/or certificates required in connection with [t]enant's use of the [p]remises....

“ ‘If [t]enant has not obtained all such [p]ermits within one hundred eighty (180) days after the date of this [l]ease, then [t]enant shall have the right to either (i) terminate this [l]ease or (ii) extend the contingency period for another sixty (60) days.... [I]f [t]enant exercises its right to extend the contingency period for an additional sixty (60) days, and if [t]enant has not obtained all such [p]ermits within the additional sixty (60) days, then [l]andlord and [t]enant shall each have the right to terminate the lease by notice given to the other party within ten (10) days after the expiration of said sixty (60) day period. In the event that either party elects to terminate this [l]ease in accordance with this [article] ... the [l]ease shall terminate as of the date of such notice of termination and thereafter neither party shall have any obligations or liability hereunder, [300 Conn. 330] except those which arose prior to the termination date. Landlord agrees to cooperate with [t]enant in connection with the [p]ermits; [t]enant agrees to reimburse [l]andlord for its out of pocket costs incurred at [t]enant's request in connection with obtaining the [p]ermits.’ ...

“The 180 day period for obtaining permits described in article six began to run on November 30, 1999, and expired on May 29, 2000. When Lighthouse failed to obtain the required permits within the stipulated time, it exercised its option to extend the lease for an additional sixty days, until July 28, 2000. Lighthouse subsequently failed to obtain the permits by the end of the extended period. Accordingly, the power company sent notice terminating the lease to Lighthouse by letter dated August 3, 2000, and the lease thereby was terminated on August 4, 2000, the date Lighthouse received actual notice of the termination.

“Shortly thereafter, Lighthouse commenced a civil action against the power company, alleging improper termination of the lease. In its ... complaint, ⁴ Lighthouse alleged, inter alia, that the power

[15 A.3d 606]

companyimproperly [300 Conn. 331] had (1) induced Lighthouse to request the sixty day extension,⁵ thereby granting the power company the right to terminate the lease at the end of the extended period if Lighthouse did not obtain all applicable governmental permits within the specified time, even though Lighthouse was not legally obligated to terminate or to extend the lease after the first 180 days, and (2) exercised its right to terminate the lease when Lighthouse failed to obtain the required permits, despite prior assurances, on which Lighthouse had relied in exercising its right to extend the lease, that it did not intend to do so.” Connecticut Light & Power Co. v. Lighthouse Landings, Inc., supra, 279 Conn. at 93–95, 900 A.2d 1242.

The complaint also alleged that the power company engaged in improper conduct after Lighthouse had requested the sixty day extension. Paragraph fourteen specifically alleged that, after Lighthouse exercised its option to extend the lease, it sought assurances from the power company that it would not terminate the lease at the end of the sixty day period because of Lighthouse's inability to secure the permits within that time.⁶ Paragraph fifteen further alleged that Lighthouse had received a letter from the power company dated July 17, 2000, confirming its receipt of Lighthouse's July 10, 2000 letter and stating that it would not use the [300 Conn. 332] permit issue to attempt to terminate the lease.⁷ Paragraph sixteen alleged that, on or about July 19, 2000, “in reliance on [the power company's] representations that the [l]ease was in force and effect and would continue to be in force regardless of any permit issues, [Lighthouse] entered into a binding contract for the purchase of a high speed ferry specifically for use for the ferry service contemplated at the [l]eased

[15 A.3d 607]

[p]remises for a cost of approximately $5,200,000.” Paragraphs seventeen and eighteen, respectively, alleged that, “[o]n or about July 19, 2000, Lighthouse paid the shipbuilder an additional nonrefundable deposit of $236,500 in connection with the aforementioned contract” and that, “[o]n or about August 3, 2000, contrary to its representations [in the July 17, 2000 letter, the power company] sent a notice to ... Lighthouse attempting to terminate the [l]ease pursuant to [article six] of the [l]ease because Lighthouse had not yet obtained the governmental permits.” Paragraph nineteen alleged that the reason why the power company wanted to terminate the lease was because, unbeknownst to Lighthouse, the power company had been negotiating a lucrative deal with another party, Strand/BRC Group, LLC (Strand), to purchase the leased premises. On the basis of these allegations, Lighthouse sought an award of damages for the power company's allegedly wrongful termination of the lease on six different grounds, including breach of lease (count one), promissory estoppel (count two), breach of the duty of good faith and fair dealing (count three), intentional misrepresentation (count four), negligent misrepresentation (count five) and violation of CUTPA (count six).

[300 Conn. 333] “On October 13, 2000, the power company filed an action for a judgment declaring that the lease with Lighthouse had been terminated properly and was ‘of no further force and effect.’ On December 7, 2000, the two actions were consolidated and transferred to the Complex Litigation Docket at Stamford. On December 21, 2000, during a pretrial conference on other matters pending in the consolidated actions, the trial court expressed its view that, under applicable [case law], the power company had terminated the lease ‘fairly [and] properly’ in accordance with its provisions ... but that the court could reinstate the lease on equitable grounds. The court also informed the parties that it intended to proceed with a trial to the court on the declaratory judgment action while discovery continued [in] the civil action.” Connecticut Light & Power Co. v. Lighthouse Landings, Inc., supra, 279 Conn. at 96, 900 A.2d 1242.

Thereafter, Lighthouse filed an answer, six special...