Warner v. Konover, 13460

• Decision Date: 21 February 1989
• Docket Number: No. 13460,13460
• Court: Connecticut Supreme Court
• Parties: Albert WARNER v. Simon KONOVER et al.

Page 1138

553 A.2d 1138

210 Conn. 150

Albert WARNER v. Simon KONOVER et al.

No. 13460.

Supreme Court of Connecticut.

Argued Jan. 11, 1989.

Decided Feb. 21, 1989.

Richard K. Mulroney, Bridgeport, with whom were Dana P. Lonergan, Trumbull, and, on the brief, Ben Schwimmer, Bridgeport, for appellant (plaintiff).

James M. Pickett, with whom, on the brief, were Morris R. Borea and Glenn T. Terk, Hartford, for appellees (defendants).

Before PETERS, C.J., and ARTHUR H. HEALEY, SHEA, GLASS and SANTANIELLO, JJ.

PETERS, Chief Justice.

The dispositive issue in this appeal is whether the plaintiff tenant, Albert Warner, has stated a cause of action against his landlords, the defendants, Simon Konover, Marvin M. Patron, estate of A. Abner Rosen and estate of Martin Spector, for breach of contract arising out of the defendants' refusal to consent to an assignment of a lease of commercial premises. The defendants successfully moved to strike the plaintiff's complaint, and judgment was thereafter rendered in the trial court on their behalf. The plaintiff filed an appeal, which we transferred to this court pursuant to Practice Book § 4023. We find error.

In an appeal from a judgment following the granting of a motion to strike, "we must take the facts to be those alleged in the plaintiff's complaint and construe the complaint in the manner most favorable to sustaining its legal sufficiency." Michaud v. Wawruck, 209 Conn. 407, 408, 551 A.2d 738 (1988), and cases cited therein. Accordingly, we assume the following factual circumstances concerning the parties' lease and their conduct pursuant thereto. On February 16, 1982, the plaintiff and the defendants entered into a five year lease of premises in the Tri-Town Shopping Plaza located on the Seymour/Ansonia line. The lease provides, in Article 13.01, that "Tenant will not assign this Lease in whole or in part, nor sublet all or any part of the Leased Premises, without the prior written consent of Landlord in each instance...." ¹ Four years later, the plaintiff contracted to sell the business that he was conducting on the leased premises. This sale was not consummated because it was contingent upon an assignment of the plaintiff's lease, and therefore required the defendants' consent, which they refused to give without a renegotiation of the rental payment. The plaintiff suffered financial losses because of his inability to sell his business.

The defendants' motion to strike the complaint relied on the terms of Article 13.01 of the lease as authority for their refusal to consent to the assignment. In the absence of a clause in the lease specifying that consent should not be unreasonably withheld, they maintained that they had reserved unfettered discretion to withhold their consent. The trial court granted the defendants' motion without filing a memorandum of decision.

On appeal, the plaintiff contends that the trial court erred in accepting the defendants' argument that they had an absolute right to refuse to consent to an assignment of his lease. The defendants maintain that Connecticut case law supports their position. We agree with the plaintiff.

It is true that this court has twice stated that, when a lease requires a landlord's prior written consent as a condition to its assignment, a landlord "could refuse to consent to an assignment and the reasons for its actions [would be] immaterial. Robinson v. Weitz, 171 Conn. 545, 549, 370 A.2d 1066 (1976)." Danpar Associates v. Somersville Mills Sales Room, Inc., 182 Conn. 444, 447, 438 A.2d 708 (1980). A careful reading of these cases discloses, however, that neither Robinson nor Danpar Associates controls this case. The issue in Robinson was the interpretation of an assignment in which the landlord expressly agreed that " 'consent will not be unreasonably withheld.' " Robinson v. Weitz, supra, 171 Conn. at 549, 370 A.2d 1066. The court's dictum about a landlord's greater right to withhold consent under other circumstances merely cited similar holdings in other jurisdictions. Danpar Associates involved a landlord's action claiming damages for a tenant's breach, in which we held that, despite a landlord's theoretical right to refuse consent to an assignment, its duty to mitigate damages operated as a practical constraint on its exercise of such a right. Danpar Associates v. Somersville Mills Sales Room, Inc., supra, 182 Conn. at 446-47, 438 A.2d 708.

The precedent that we deem more persuasive than either Robinson or Danpar Associates is a case that neither party appears to have brought to the attention of the trial court. Central New Haven Development Corporation v. La Crepe, Inc., 177 Conn. 212, 413 A.2d 840 (1979), involved a landlord's action to recover damages from a commercial tenant for breach of a lease. The tenant defended against liability on the basis of a clause giving it unfettered discretion to cancel the lease because of the landlord's conceded failure, three years earlier, to obtain a nondisturbance agreement from the mortgagee. Although the tenant's option to cancel was in terms unlimited, and the lease contained a nonwaiver clause, we held that the tenant was in breach because it had unreasonably delayed its exercise of its option. Id., 215-17, 413 A.2d 840. We relied squarely on § 205 (then § 231) of the Restatement (Second) of Contracts, which provides: "Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement." Id., 217, 413 A.2d 840.

If a commercial lease imposes a duty of good faith and fair dealing upon a tenant, there is no reason not to impose a similar duty upon a landlord. The provisions of § 205 of the Restatement are therefore as applicable in this case as they were in La Crepe, Inc. Accordingly, we hold that a landlord who contractually retains the discretion to withhold its consent to the assignment of a tenant's lease must exercise that discretion in a manner consistent with good faith and fair dealing. Although this holding may well represent a minority position nationwide; see 1 M. Friedman, Leases (1978) § 7.304; a similar result has been reached in a number of other jurisdictions. See, e.g., Homa-Goff Interiors, Inc. v. Cowden, 350 So.2d 1035, 1038 (Ala.1977); Fernandez v. Vazquez, 397 So.2d 1171, 1173 (Fla.App.1981); Arrington v. Walter E. Heller International Corporation, 30 Ill.App.3d 631, 640-41, 333 N.E.2d 50 (1975); Shaker Building Co. v. Federal Lime & Stone Co., 28 Ohio Misc. 246, 252, 277 N.E.2d 584 (1971); and compare 2 Restatement (Second), Property, Landlord and Tenant (1977) § 15.2, comment i.

It would be premature, on the current state of the record,...