Pic Associates v. Greenwich Place Gl Acquisition Llc.

• Decision Date: 19 April 2011
• Docket Number: No. 31606.,31606.
• Citation: 128 Conn.App. 151,17 A.3d 93
• Court: Connecticut Court of Appeals
• Parties: PIC ASSOCIATES, LLCv.GREENWICH PLACE GL ACQUISITION, LLC.

128 Conn.App. 151

17 A.3d 93

PIC ASSOCIATES, LLC

v.GREENWICH PLACE GL ACQUISITION, LLC.

No. 31606.

Appellate Court of Connecticut.

Argued Nov. 16, 2010.Decided April 19, 2011.

James A. Fulton, Greenwich, for the appellant (plaintiff).Michael D. O'Connell, with whom, on the brief, was Erin Arcesi Mutty, Hartford, for the appellee (defendant).HARPER, LAVINE and McDONALD, Js.LAVINE, J.

In this summary process action involving commercial real property, the plaintiff, PIC Associates, LLC, appeals from the judgment of the trial court, rendered after a trial to the court, in favor of the defendant, Greenwich Place GL Acquisition, LLC. On appeal, the plaintiff claims that the court mistakenly concluded that the defendant had proven its special defense of equitable nonforfeiture as to both counts of the plaintiff's complaint. We affirm the judgment of the trial court.

There is no dispute as to the following facts. The parties are the successors in interest to a fifty year ground lease for real property that abuts West Putnam Avenue in Greenwich (town). Forty-eight units of a larger apartment complex known as Putnam Green are situated on the premises.¹ The original lessor was John & John, Inc., the plaintiff's predecessor in interest, and FAWN Associates was the original lessee. Antares Putnam Green IV, SPE, LLC (Antares), succeeded to the interests of FAWN Associates.

In 2007, Antares allowed numerous mechanic's liens to be placed on the premises and recorded in the town land records. On December 27, 2007, the plaintiff delivered notice to Antares that it was in default of the lease by reason of those mechanic's liens.² On January 11, 2008,³ the defendant received an assignment of the lease from Antares and acquired ownership of the apartment complex on the premises. At the time of the assignment, Radco Management, LLC (Radco), assumed responsibility for the management of the premises and apartment complex on behalf of the defendant. With respect to the mechanic's liens, the defendant sent the plaintiff a surety bond in the amount of $2,108,733 on January 24, 2008.

Neither Antares nor the defendant paid the plaintiff the fixed monthly rent for January, 2008, within thirty days of its due date as required by the lease. On February 1, 2008, the plaintiff served the defendant with a notice to quit, which gave the following reasons: (1) “nonpayment of rent when due,” and (2) “an expressed stipulation in your written lease gives the lessor the right to terminate your lease and re-enter the demised premises upon the lessee's failure to cure any default in the performance of any obligations or terms of the lease within thirty (30) days after notice thereof.” Immediately upon receipt of the notice to quit, the defendant paid the plaintiff rent for both January and February, 2008.

The plaintiff commenced this summary process action on November 4, 2008. Count one alleged that the plaintiff was entitled to possession of the premises due to the defendant's failure to pay the January, 2008 rent when it was due, and count two alleged that the plaintiff was entitled to possession of the premises for the defendant's failure to discharge the mechanic's liens as required by the lease. In response, the defendant alleged several special defenses, but only the doctrine of equitable nonforfeiture is relevant to this appeal.⁴

The matter was tried to the court on May 21 and September 1, 2009. The court issued its findings and judgment orally on October 8, 2009. The court found that the defendant was negligent in failing to pay the January, 2008 rent pursuant to the lease but that the failure was not wilful or gross negligence. The court also found that the defendant negligently failed to post the proper bonds for the mechanic's liens but concluded that the plaintiff contributed to the mechanic's lien issue by not responding to the January 24, 2008 letter in which the defendant's counsel, Nellie P. Camerik, requested that the plaintiff's counsel communicate “any questions regarding this matter....” The court concluded that the defendant had prevailed on its special defense of equitable nonforfeiture and rendered judgment in its favor. The plaintiff filed a motion for reargument and reconsideration. The court granted the motion for reargument, but following the reargument on October 20, 2009, denied the motion for reconsideration. The plaintiff appealed. Additional facts will be set forth as necessary.

“Summary process is a special statutory procedure designed to provide an expeditious remedy.... It enable[s] landlords to obtain possession of leased premises without suffering the delay, loss and expense to which, under the common-law actions, they might be subjected by tenants wrongfully holding over their terms.... Summary process statutes secure a prompt hearing and final determination.... Therefore, the statutes relating to summary process must be narrowly construed and strictly followed.” (Internal quotation marks omitted.) HUD/Willow Street Apartments v. Gonzalez, 68 Conn.App. 638, 642–43, 792 A.2d 165 (2002).

“[E]quitable defenses ... implicating the right to possession are available in a summary process proceeding.” (Internal quotation marks omitted.) Cumberland Farms, Inc. v. Dairy Mart, Inc., 225 Conn. 771, 777, 627 A.2d 386 (1993). “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.... [E]very reasonable presumption should be given in favor of its correctness.... The ultimate issue is whether the court could reasonably conclude as it did.” Citations omitted; internal quotation marks omitted.) Elliott v. South Isle Food Corp., 6 Conn.App. 373, 377, 506 A.2d 147 (1986). “Our practice in this [s]tate has been to give a liberal interpretation to equitable rules in working out, as far as possible, a just result.” Petterson v. Weinstock, 106 Conn. 436, 446, 138 A. 433 (1927). “Although we ordinarily are reluctant to interfere with a trial court's equitable discretion ... we will reverse where we find that a trial court acting as a court of equity could not reasonably have concluded as it did ... or to prevent abuse or injustice.” (Internal quotation marks omitted.) 19 Perry Street, LLC v. Unionville Water Co., 294 Conn. 611, 629–30, 987 A.2d 1009 (2010).

I

The plaintiff's first claim is that the court erred in concluding that the defendant had proven its special defense of equitable nonforfeiture for nonpayment of rent by finding that the defendant merely was negligent in failing to pay the January, 2008 rent on time. We disagree.

In response to the November, 2008 summary process action in which the plaintiff alleged that it was entitled to possession of the premises due to nonpayment of the January, 2008 rent,⁵ the defendant denied that it had failed to pay the January, 2008 rent and alleged the doctrine of equitable nonforfeiture as a special defense, pleading, in part, that eviction would not be an appropriate remedy in view of the improvements the defendant and its predecessors in interest had made to the premises.⁶ The plaintiff denied the defendant's special defense.

“[E]quitable defenses and counterclaims implicating the right to possession are available in a summary process proceeding. If, then, the tenant's equitable claim was properly raised, it was properly before the trial court.” (Internal quotation marks omitted.) Cumberland Farms, Inc. v. Dairy Mart, Inc., supra, 225 Conn. at 777, 627 A.2d 386. “Equitable principles barring forfeitures may apply to summary process actions for nonpayment of rent if: (1) the tenant's breach was not [wilful] or grossly negligent; (2) upon eviction the tenant will suffer a loss wholly disproportionate to the injury to the landlord; and (3) the landlord's injury is reparable.” ⁷ Id., at 778, 627 A.2d 386.

The court found that the defendant's failure to pay timely the January, 2008 rent constituted negligence, rather than gross negligence. The plaintiff argues, on appeal, that the court's conclusion was incorrect because it was predicated on the court's finding that the defendant paid the plaintiff within a few days of receiving the notice to quit.⁸ Although the court's oral decision is a bit ambiguous, our review of the decision reveals that the court made a specific finding that the defendant was negligent because it did not ask Antares whether the January, 2008 rent had been paid.

The court found in part: “The plaintiff, in its complaint, has alleged that it served the notice to quit because the [defendant] had not paid the rent, and that's true and there's no argument about it. The January rent was not paid timely. However, when the notice to quit was issued in early ... February, not only was the January rent paid, but the February rent was paid. So, as I indicated earlier, and I think it's not coming by surprise, I think the [defendant was] negligent. I think that [it] should have, being a responsible large organization ... with billions of dollars or millions of dollars, should have made a key question, did you pay the January rent? ... I don't care how many papers you have on the table, that's so fundamental that it clearly was negligent. But on the other hand, I don't think it was wilful.”

Our Supreme Court has defined gross negligence as “very great or excessive negligence, or as the want of, or failure to exercise, even slight or scant care or slight diligence....” (Internal quotation marks omitted.) Hanks v. Powder Ridge Restaurant Corp., 276 Conn. 314, 338, 885 A.2d 734 (2005). It has defined wilful misconduct “as intentional conduct designed to injure for which there is no just cause or excuse.... [Its] characteristic element is the design to injure either actually entertained or to be implied from the conduct and circumstances.... Not only the action producing the injury but the resulting injury also must be intentional.” (Internal quotation marks omitted...