Opinion
CVH8461
02-16-2016
High Line Lube, LLC dba Valvoline Instant Oil Change v. Hickory North Properties, LLC
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON PLAINTIFF'S APPLICATION FOR TEMPORARY INJUNCTION
Glen A. Woods, Superior Court Judge.
An order to show cause was issued by the Court and served on the defendant-landlord Hickory North Properties, LLC (Hickory North). The Court heard the parties on this matter on June 26, 2015, July 27, 2015, September 21, 2015 and September 28, 2015 and each party presented documentary and testimonial evidence subject to cross examination. Plaintiff, High Line Lube, LLC d/b/a Valvoline Instant Oil Change (High Line), and defendant filed trial briefs that were received on October 19, 2015. The Court has weighed all the evidence and assessed the credibility of the witnesses and has made its findings based upon the applicable legal standards and the totality of the evidence presented.
I. FACTUAL BACKGROUND
On May 1, 2000, Hickory North leased space located at 4 National Drive, Windsor Locks, Connecticut to Windsor Locks Fast Oil, LLC for a term of ten years, with an option to renew the lease for eight additional five-year terms. Windsor Locks Fast Oil, LLC assigned the lease to High Line on March 29, 2007 and defendant-landlord Hickory North consented and executed an Assignment Consent and Estoppel Certificate. In order to renew the lease, written notification was required six months prior to the end of the lease term. The lease contains a condition that landlord will not lease any part of the premises to any other tenant " operating a fast oil change or related activity or related and/or ancillary operation. In the event Landlord breaches this representation, Tenant shall have the right to obtain injunctive relief or any other legal action available to it to enforce the above restriction." (Pl's Ex. 3, 1F, p. 24.)
The landlord Hickory North leased to a tenant, Heavys Automotive, Inc. (Heavys), space next to tenant High Line's space. The lease is dated to commence on August 1, 2014 but was signed on November 19, 2014. On July 25, 2014, High Line sent a letter to Hickory North notifying them that Heavys was offering the same services offered by High Line and that this was a violation of the restrictive covenant in High Line's lease. On October 27, 2014, High Line filed an application for temporary and permanent injunction against Hickory North seeking to enjoin Hickory North from allowing any other tenant from operating a " fast oil change or related activity, or related and/or ancillary operation including air conditioning services." Additionally, High Line sought to declare void any provision of any existing Lease for any tenant that allows fast oil change or ancillary operations including air conditioning services.
II. LEGAL STANDARD
" The principal purpose of a temporary injunction is to preserve the status quo until the rights of the parties can be finally determined after a hearing on the merits." (Internal quotation marks omitted.) Clinton v. Middlesex Mutual Assurance Co., 37 Conn.App. 269, 270, 655 A.2d 814 (1995). Generally, the party seeking the injunction must prove the lack of a remedy at law and must show irreparable harm and substantial injury. Berin v. Olson, 183 Conn. 337, 340, 439 A.2d 357 (1981); Jones v. Foote, 165 Conn. 516, 338 A.2d 467 (1973). However, there is a more relaxed rule invoked when a restrictive covenant is involved. See Access Am. v. Mazzotta, Superior Court, judicial district of Middlesex at Middletown, Docket No. CV 05-40033 89 (September 14, 2005, Silbert, J.) (" The standard for granting a temporary injunction to enforce a covenant not to compete, however, is somewhat different in that the plaintiff does not need to prove irreparable harm. While ordinarily proof of imminent harm is essential, in this type of case there is no such requirement"). " A restrictive covenant may be enforced by injunction without a showing that violation of the covenant will cause harm to the plaintiff, so long as such relief is not inequitable." Hartford Electric Light Co. v. Levitz, 173 Conn. 15, 21-22, 376 A.2d 381 (1977); see also Gino's Pizza of East Hartford, Inc. v. Kaplan, 193 Conn. 135, 139, 475 A.2d 305 (1984). The burden of proof is upon the party seeking the temporary injunction " by the preponderance of evidence." Beacon Falls v. Posick, 17 Conn.App. 17, 24 n.5, 549 A.2d 656 (1988), rev'd on other grounds, 212 Conn. 570, 563 A.2d 285 (1989).
III. DISCUSSION
a. The Lease
The defendant argues that plaintiff is a holdover tenant with no right to enforce the restrictive covenant referenced above. (Pl's Ex. 3, 1F, p. 24.) The plaintiff argues that there is a valid lease between landlord and tenant which permits the tenant to seek injunctive relief. The plaintiff admits that there is no proof that it sent written notice exercising an intention to renew the original lease that terminated on April 30, 2010 as required by the lease. (Pl's Ex. 3, page 23, 1A.) The plaintiff argues the existence of a new rental term by demonstrating the payment of a 15% monthly rental increase provided for in the renewal term of the lease and acceptance by the landlord of this increased rental amount.
In United Soc. & Mental Health Services, Inc. v. Rodowicz, 96 Conn.App. 34, 39, 899 A.2d 85 (2006) (citing Perrotti v. Chiodo, 21 Conn.App. 288, 290, 573 A.2d 342 (1990)), the Connecticut Appellate Court found that if an option in a lease to renew has been exercised it requires the trier of fact to look to the intent of the parties as expressed in their words and deeds. See also Zuckerman Group v. Raveis, 4 Conn.App. 568, 571-72, 495 A.2d 300 (1985). A lessor may waive a notice requirement for exercising an option to renew a lease by conduct. Adam v. Consolini, 135 Conn. 321, 324, 64 A.2d 44 (1949). " Our case law is clear that a landlord may be deemed to have waived the notice requirements for a renewal or extension option in circumstances where the tenant is seeking to hold the landlord to an extension of the term." David A. Altschuler Trust v. Blanchette, 33 Conn.App. 570, 574, 636 A.2d 1381 (1994).
Hickory North's conduct in the present case clearly demonstrates that it waived the notice requirement in the lease. Hickory North continued to send Common Area Maintenance charges (CAM charges) referencing " lease year" for several years following the alleged expiration of the parties' lease. High Line continued to pay Hickory North the rental amount specified in the original lease for the first option term extension, and Hickory continued to accept the payments as rent. Also, Hickory North did not notify High Line's Franchisor, Valvoline Instant Oil Change Franchising Inc. (Valvoline), of Valvoline's right, under the Assignment Consent and Estoppel Certificate, to exercise the option to renew the lease in the event that High Line elected to not exercise the option. Additionally, Hickory North's lease agreement with Heavys presumed the application of the restrictive covenant contained in High Line's lease. Hickory North continued to behave as though High Line had exercised the option to renew. All of its actions, after the alleged expiration of the lease, are in direct conflict with the present claim that the lease has expired and High Line has a month-to-month tenancy. As a result, the Court finds that Hickory North has waived the written notice requirement contained in the parties' lease.
b. Restrictive Covenant
High Line argues that Hickory North entered into a lease agreement with Heavys Automotive beginning August 1, 2014 wherein the lease did not completely notify Heavys Automotive of High Line's restrictive covenant. Further, High Line argues that Heavys advertised inappropriate quick oil change and ancillary operations involving air conditioning, and that Hickory North failed to take appropriate actions against Heavys in order to protect High Line's covenant.
Section 1F of the Rider to the Lease between High Line and Hickory North states:
The Landlord, its successors and assigns, shall not during the Term of the Lease or any extensions thereto, lease any part of the Premises located at 4 National Drive, Windsor Locks, CT to any other tenant operating a fast oil change or related activity or related and/or ancillary operation. In the event, Landlord breaches this representation, Tenant shall have the right to obtain injunctive relief or any other legal action available to it to enforce the above restriction. (Pl's Ex. 3, 1F, p. 24.)
The Court finds that the restrictive covenant clearly prohibits leasing to " any other tenant" that performs " fast oil changes" or " related and/or ancillary operation[s]." (Emphasis added.) This is a covenant that was bargained for and subject to enforcement. While there was conflicting testimony as to whether fast oil changes or ancillary operations from fast lube operations were performed, " [a] restrictive covenant may be enforced by injunction without a showing that violation will cause harm to the plaintiff, so long as such relief is not inequitable." Hartford Elec. Light Co. v. Levitz, 173 Conn. 15, 22, 376 A.2d 381 (1977).
Further, the Court finds that the lease between Hickory North and Heavys did not contain the complete language contained in High Line's lease and did not put Heavys on notice as to the complete nature of the restrictive covenant.
7. USE OF PREMISES
The demised premises are to be used and occupied for the purpose of a Used Car Dealership and Auto Repairer Business, Including Hi-Performance and Diesel Tuning. Tenant is not permitted to offer and/or perform Fast Oil Change services for the term of the Lease. (Pl's Ex. 1 Section 7.)
Testimony of Robin Sabine, a member of Hickory North, made it clear that the lease between Heavys and Hickory North did not completely notify Heavys of the entire restrictive covenant because it omitted the prohibition against Heavys performing any " related and/or ancillary operation ." (Emphasis added.)
Further evidence of a breach of the restrictive covenant permitted by Hickory North is evidenced by the published website of Heavys. High Line produced evidence that as of August 7, 2014, its website listed services such as air conditioning, cooling system maintenance, tire rotation and transmission maintenance and was offering coupons for $5.00 off an oil change. Further, as of June 26, 2015 the content of the website of Heavys still violated the restrictive covenant.
The Court further finds that there was a substantial conflict of interest that may have caused Hickory North to fail to enforce the restrictive covenant as to Heavys. Trial testimony elicited that the 50 percent owner of the defendant Hickory North, Cheryl Mikalonis is the mother of Samuel and Daniel Mikalonis, record owners of Heavys. Therefore Cheryl Mikalonis from Hickory North is the landlord to her sons. Significantly, additional documentary evidence of the defendant also revealed that Cheryl Mikalonis from Hickory North is employed as the " Office Manager/Bookkeeper" for Heavys.
The Court finds by a preponderance of the evidence that plaintiff High Line is the sole and only tenant permitted to undertake quick oil change and/or ancillary operations at 4 National Drive in Windsor Locks. In addition, the Court finds that injunctive relief is the appropriate remedy to enforce the restrictive covenant; that irreparable harm need not be demonstrated; that there is a likelihood that High Line will prevail in proving its right to enforce its restrictive covenant; and that the conflict of interest and family ties contained in the ownership of defendant Hickory North and Heavys makes it unlikely that defendant will enforce the restrictive covenant in the future.
IV. ORDER
WHEREFORE, the Court orders a temporary injunction against the Defendant Hickory North its successors and assigns, prohibiting Hickory North from allowing any portion of 4 National Drive, Windsor Locks, Connecticut to be used by any tenant other than High Line for operations undertaking fast oil change or related activity, or related and/or ancillary operation including air conditioning services. Further, the Court declares void any portion of any existing lease at 4 National Drive, Windsor Locks, Connecticut which allows any tenant other than High Line to operate a fast oil change or related activity or related and/or ancillary activity, including air conditioning services.
SO ORDERED.