Orange Palladium, LLC v. Readey

• Decision Date: 23 July 2013
• Docket Number: No. 33944.,33944.
• Citation: 144 Conn.App. 283,72 A.3d 1191
• Court: Connecticut Court of Appeals
• Parties: ORANGE PALLADIUM, LLC v. William READEY et al.

144 Conn.App. 283

72 A.3d 1191

ORANGE PALLADIUM, LLC

v.William READEY et al.

No. 33944.

Appellate Court of Connecticut.

Argued Nov. 16, 2012.

Decided July 23, 2013.

Joseph L. Rini, for the appellant (defendant Bru Café, Inc.).

Pasquale Young, with whom was Stuart A. Margolis, New Haven, for the appellee (plaintiff).

LAVINE, ALVORD and SHELDON, Js.

LAVINE, J.

This appeal concerns a commercial eviction brought by the plaintiff, Orange Palladium, LLC, against the defendant Bru Café, Inc. ¹ The central issue presented is whether the defendant defaulted under an agreement, as modified, between the parties by failing to make required use and occupancy payments. The defendant argued at trial that it had no obligation to make the contested payments because the making of the payments was conditioned upon the plaintiff's submitting a plan to repair leaks in the atrium and also taking certain steps to repair the property. The plaintiff disagreed, contending that the plan it furnished to the defendant satisfied the agreement and that the defendant's duty to pay rent had been triggered.

More specifically, the defendant appeals from the judgment of possession rendered in favor of the plaintiff, pursuant to the trial court order granting the plaintiff's motion to enforce a settlement agreement and from the later denial of the defendant's application for a writ of audita querela. The defendant claims that the court improperly (1) construed (a) the settlement agreement to be unambiguous and enforceable as well as (b) the intent of the parties as reflected in the settlement agreement, (2) failed to find that that the parties orally modified the defendant's payment obligations and (3) denied the defendant's application for a writ of audita querela.² We affirm the judgments of the trial court.

The following facts and procedural history provide the necessary background for resolving this appeal. In 2004, the plaintiff's predecessor in interest leased a commercial building in New Haven to the defendant's predecessor in interest for a term of ten years. In 2008, the defendant assumed all rights and responsibilities under the lease from its predecessor, and in 2009, the plaintiff acquired title to the property, succeeding to its own predecessor's position on the lease. In February, 2010, the plaintiff commenced the present eviction action, alleging nonpayment of rent. In November, 2010, the defendant filed a revised answer alleging numerous special defenses and a counterclaim.

On January 3, 2011, approximately three weeks before trial was scheduled to begin, the city of New Haven (city) health department issued a citation to Lynne Franford in her capacity as managing member of the plaintiff. The citation ordered the plaintiff to correct “water infiltration” and “sanitation” issues that existed on the premises.

On January 25, 2011, the eve of trial, the parties reached an agreement (January accord). Among other things, the agreement set a schedule by which the defendant would make monthly use and occupancy payments and that the plaintiff would undertake certain repairs to the premises to the satisfaction of city authorities. The plaintiff's counsel read the January accord into the record.³

The defendant tendered the use and occupancy payment for April, 2011, to the plaintiff. In early April, 2011, the defendant filed a motion for a default judgment, alleging that the plaintiff had breached the January accord by not satisfying its obligations, and the defendant requested a hearing to enforce the January accord pursuant to Audubon Parking Associates Ltd. Partnership v. Barclay & Stubbs, Inc., 225 Conn. 804, 626 A.2d 729 (1993)( Audubon ). A hearing on the defendant's motion was scheduled to be held on May 17, 2011. Instead, that day the parties agreed to modify the January accord. The document memorializing this second agreement (May accord) consists of two handwritten pages in coarse penmanship, with numerous abbreviations, crossed-out words and insertions as well as shortcuts in grammar and usage.⁴ The handwritten pages are accompanied by a form, signed by counsel for each party, indicating that the document modifies the January accord.⁵ Among other things, the parties agreed that the plaintiff would provide a plan for repairs as a condition precedent to the release of the May use and occupancy payment and that the defendant would release the June use and occupancy payment as repair work progressed. The parties adopted a dispute settlement mechanism through which areas of disagreement were to be submitted to and resolved with the assistance of Cynthia Teixeira, who is manager of dispute resolution of the Housing Session of the Superior Court at New Haven.

On May 26, 2011, the plaintiff e-mailed the defendant a plan for repairs, although the defendant claims that the planned repairs would not have satisfied city authorities. The defendant did not tender the use and occupancy payment for May, 2011. The defendant gave its counsel a check for that purpose, but instructed counsel not to deposit the check, which precluded counsel from releasing the funds to the plaintiff. On May 31, 2011, the plaintiff filed a motion for judgment of possession, alleging that the defendant had failed to comply with the settlement agreement by failing to tender use and occupancy payments. Shortly thereafter, the defendant filed an objection to the plaintiff's motion as well as its own motion alleging that the plaintiff had failed to comply with the settlement agreement by failing to submit a suitable plan and to undertake repairs.

On July 5, 2011, the representatives of the plaintiff and the defendant met, each with counsel present, to review their respective obligations under the settlement agreement and to discuss the possibility of an abeyance. The results of that meeting were inconclusive.

In October, 2011, the court conducted an Audubon hearing to determine whether the settlement agreement was enforceable and who, if anyone, had breached the settlement agreement. Each party sought to have the settlement agreement enforced pursuant to its own interpretation, and the court heard testimony from various witnesses and argument from both parties. It was undisputed at the hearing that repairs were not complete and that the roof continued to leak. The court concluded that the final sentence of the May accord was unintelligible on its face and that it was not clear and unambiguous. See footnote 4 of this opinion. In addition, the court ostensibly declined to consider any terms in the January accord in construing the meaning of terms in the May accord and refused to admit extrinsic evidence pertaining to the meaning of the final sentence.

Nonetheless, the court found the essential terms of the settlement agreement to be clear and unambiguous and concluded that the defendant had violated the “terms of the [settlement] agreement regarding payment of use and occupancy for May and June 2011” by failing to tender payment when it was due. The court concluded that there had been no dispute as to what repairs were needed because the parties had never invoked the dispute resolution mechanism by submitting any dispute to Teixeira for resolution. The court concluded that the defendant had breached the settlement agreement and rendered a judgment of possession for the plaintiff. This appeal followed. Further facts and procedural history are set forth as necessary.

I

The defendant claims that the court improperly construed the settlement agreement. Specifically, the defendant claims that the court (a) concluded improperly that the settlement agreement was unambiguous and enforceable and (b) misconstrued the intent of the parties as reflected in the settlement agreement by ignoring provisions in the settlement agreement. We reject the defendant's claims.⁶

We review the relevant legal standards. “A trial court has the inherent power to enforce summarily a settlement agreement as a matter of law when the terms of the agreement are clear and unambiguous.” Audubon, supra, 225 Conn. at 811, 626 A.2d 729. “A settlement agreement is a contract among the parties.... It is well settled that [w]here the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms.... Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact ... [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law.... The court's determination as to whether a contract is ambiguous is a question of law; our standard of review, therefore, is de novo.” (Citation omitted; internal quotation marks omitted.) Amica Mutual Ins. Co. v. Welch Enterprises, Inc., 114 Conn.App. 290, 294, 970 A.2d 730 (2009).

By contrast, “[i]f the factual basis of the court's decision is challenged, our review includes determining whether the facts set out in the memorandum of decision are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, those facts are clearly erroneous.... A court's determination is clearly erroneous only in cases in which the record contains no evidence to support it, or in cases in which there is evidence, but the reviewing court is left with the definite and firm conviction that a mistake has been made.” (Citation omitted; emphasis omitted; internal quotation marks omitted.) MacDonald v. Pinto, 62 Conn.App. 317, 320, 771 A.2d 156 (2001).

“If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous.” United Illuminating Co. v. Wisvest–Connecticut, LLC, 259 Conn. 665, 671, 791 A.2d 546 (2002). “Only when the terms are clear and unambiguous can the court enforce [a] settlement agreement.” Amica Mutual Ins. Co. v. Welch Enterprises, Inc., supra, 114 Conn.App. at 295, 970 A.2d 730. “In determining...