Opinion
Docket No. CVN 0406 2001.
December 12, 2005
MEMORANDUM OF DECISION
The plaintiff, Wagner Wagner Auto Sales, Inc., also known as, Wagner Wagner Motor Sales, Inc. ("Wagner and Wagner"), has brought this civil action against the defendants, Kathleen B. Tarro, Richard M. Tarro ("Tarros") and Elegant Living, LLC ("Elegant Living"). The plaintiff seeks unpaid rent and attorney's fees from the defendants, resulting from the defendants' occupancy of the commercial premises known as, 462 Silas Deane Highway ("premises") located in the Town of Wethersfield, Connecticut. The leased premises consist of a parking area and a two story building, containing approximately 6,400 square feet of space, with half of the total space located on each floor.
On or about December 28, 2000, 462 General Partners, the owner of the building leased ("original lease") (Ex. 1) the premises to the plaintiff in order for the plaintiff to conduct a business at the location through a franchise agreement with Indian Motorcycles. At the time of the commencement of this action, the entity, known as, 462 General Partners was owned solely by Robert Nocera. During its tenancy, the plaintiff sold motorcycles on the upper floor and repaired and sold parts and accessories for motorcycles on the lower floor. The plaintiff ceased operation of its business at the premises in October 2003.
Shortly after the closing of the Indian Motorcycle business, the Tarros contacted Nocera and Ronald Wagner, an officer of the plaintiff, in order to lease the premises for an upscale antique store. After numerous meetings, the plaintiff entered into a written sub-lease and rental security agreement ("sub-lease") on November 21, 2003 with the defendants. Nocera, on behalf of 462 General Partners, consented to the sub-lease between the plaintiff and the defendants.
Richard Tarro obtained the keys to the premises on November 25, 2003. Richard Tarro testified that he had inspected the premises prior to signing the sublease. Kathleen Tarro had viewed the premises before signing the sub-lease.
Elegant Living moved into the premises on or about December 1, 2003. It set up an antique/furniture business for a January 2004 opening. The defendants have been open for business and have been selling merchandise since mid-January 2004.
The roof leaked in December 2003. After the defendants notified the plaintiff regarding the roof, the plaintiff notified Nocera. In early January 2004, a new roof was installed on the building where the premises are located.
The defendants continued to complain of roof leaks. Individuals from the roofing company came to the premises and made some repairs to the new roof. The town building inspector, Brian O'Connor, and the town fire marshal, Gary Santoro, also made several trips to inspect the premises. A water puddle was observed on the floor and on the front window sill, but the witnesses were unable to locate a leak coming from the roof above the ceiling tiles.
The defendants failed to pay rent after January 2004. On January 1, 2004, the yearly rent due the plaintiff was $43,200.00, payable in monthly installments of $3,600.00 (Ex. 1). As reasons for their failure to pay rent, the defendants allege that the roof continued to leak after it was replaced in early January 2004; that the front windows were not properly sealed; that they could not use the lower floor as retail space to sell their merchandize; and that the omissions by the plaintiff caused the defendants to suffer damage to their personal property and damages from being unable to use the first floor space.
The plaintiff brought a summary process action against the defendants for failure to pay rent. Judgment for possession of the premises was rendered against the defendants on February 10, 2005 in favor of the plaintiff. The defendants have appealed the summary process judgment and the appeal is presently pending in the appellate court.
The plaintiff had commenced a prior summary process action against the defendants. The prior case was dismissed because the notice to quit possession relied upon by the plaintiff in that case was adjudicated to be invalid.
The parties disagree regarding the initial payments of $1,000.00 and $2,200.00 on the sub-lease, as to whether the payments were for rent or for a security deposit on the sub-lease. The initial payments made by the defendants were for rent because Section 15 of the sub-lease specifically acknowledges that there was no payment of a security deposit.
DISCUSSION
The plaintiff is a Massachusetts corporation and is duly incorporated in that state under the name, Wagner and Wagner Auto Sales, Inc. The sub-lease between the plaintiff and the defendant was prepared by the defendants' counsel. In the sub-lease the plaintiff is referred to as Wagner and Wagner Motor Sales, Inc. This court ruled, in the summary process action, and now rules that it was a scrivener's error when the word "Motor" was used instead of the word "Auto" when referring to the plaintiff in the sub-lease.
"A lease is a contract and questions concerning it are determined in accordance with usual contract law . . . The existence and terms of a contract are determined from the intent of the parties . . . The party's intentions manifested by their acts and words are essential to the court's determination of whether a contract was entered into and what its terms were." (Citations omitted; internal quotation marks omitted.) Amwax Corp. v. Chadwick, 28 Conn.App. 739, 741-742 (1992).
The plaintiff intended to be bound by its sub-lease with the defendants and the defendants intended to be bound by the same sub-lease with the plaintiff. The sub-lease was a binding contract between the parties. The defendants' second special defense is without merit.
The defendants assert that the plaintiff cannot maintain this action because the plaintiff failed to obtain a certificate of authority from the State of Connecticut as required by Conn. Gen. Stat. Section 33-920. The statute provides:
Sec. 33-920. Authority to transact business required.
(a) A foreign corporation, other than an insurance, surety or indemnity company, may not transact business in this state until it obtains a certificate of authority from the Secretary of the State. No foreign corporation engaged in the business of a telegraph company, gas, electric, electric distribution or water company, or cemetery corporation, or of any company requiring the right to take and condemn lands or to occupy the public highways of this state, and no foreign telephone company, shall transact in this state the business authorized by its certificate of incorporation or by the laws of the state under which it was organized, unless empowered so to do by some general or special act of this state, except for the purpose of carrying out and renewing contracts existing upon August 1, 1903. No insurance, surety or indemnity company shall transact business in this state until it has procured a license from the Insurance Commissioner in accordance with the provisions of section 38a-41.
Here, the plaintiff entered into a sub-lease agreement with the defendants. Pursuant to the terms of the sublease, the plaintiff was entitled to collect monthly rent from the defendants and undertook some obligations as described in the sublease (Ex. 2). The obligations to "perform repairs to heating, air conditioning and roof only", are activities that are not part of the plaintiff's business. The plaintiff is an automobile dealer. These repairs, if required, would, in all likelihood, be performed by independent contractors. The activities of the plaintiff in this state, pursuant to the sub-lease, include the receipt of rent from the defendants and the possible hiring of contractors to perform its obligations under the sub-lease. These activities by the plaintiff do not amount to transacting business in this state. Kelly-Springfield Tire Co. V. Bajorski, 228 Conn. 137 (1993)
It is true that the plaintiff conducted business in the state of Connecticut when it sold and serviced Indian motorcycles. In all likelihood, these activities would be deemed "transacting business" in this state. However, the plaintiff terminated its Indian motorcycle operations in this state in October 2003 prior to its sub-lease with the defendants.
The defendants' first special defense to the amended complaint has no merit. The activities of the plaintiff do not amount to, "transacting business" in this state. Therefore, the plaintiff has standing to bring this action.
A review of the pertinent clauses of the lease and sub-lease is necessary in order to determine the other issues raised by the defendants. In Paragraph 1 of the sub-lease (Ex. 2) Elegant Living agreed to sub-lease the premises and the sublease refers to the original lease between the plaintiff and 462 General Partners (Ex. 1). In the sub-lease Elegant Living was provided access to the premises prior to December 1, 2003 and the payment of rent commenced on January 1, 2004 (Ex. 2, Paragraph 1).
In Paragraph 1 of the sub-lease, the plaintiff agreed to "be responsible for repairs to heating, air conditioning and roof only. All other terms of the [original] lease shall remain in effect." Further, in Paragraph 1 of the sub-lease, the plaintiff agreed to contact the window installer to have the leaks repaired around the picture window in the front of the building. The plaintiff admits that it failed to contact the window installer to have the claimed leaks repaired around the picture window.
Paragraph 2 of the sub-lese provides that the Tarros and Elegant Living guaranteed payment of the rent and all charges and expenses on the premises pursuant to the lease between the plaintiff and 462 General Partners. In the sublease, Elegant Living agreed that it "shall have all the rights, privileges andobligations of Wagner and Wagner Motor Sales, Inc. to that lease." (Paragraph 1, Ex. 1) (Court's emphasis).
The Fifth paragraph of the original lease provides: "The Tenant has examined the premises and accepts them in their present condition and without any representations on the part of the Landlord or its agents as to the present or future conditions of the premises." Richard Tarro and Kathleen Tarro inspected the premises and the defendants agreed to be bound to the original lease, the defendants cannot now complain that the plaintiff is required to make repairs to the premises other than those specifically required of the plaintiff in the sub-lease.
In the sub-lease, the plaintiff agreed to be responsible for repairs to heating, air conditioning and roof only. Nocera, the principal of 462 General Partners, testified that he replaced the roof because he felt that the new roof was not a tenant obligation under the original lease. The roof is under warranty and has been inspected and repaired by the installer, Diamond, Inc. on some occasions.
The defendants assert that they should not be required to pay rent because the premises are untenable due to a leaking roof, electrical problems and code violations. The defendants contend that the electrical problems and code violations do not allow the defendants to use the basement floor for the sale of furniture and other merchandise that are sold on the ground floor by the defendants. However, these obligations, other than heating, air conditioning and roof repairs, belong to the defendants pursuant to Paragraph 1 of the sub-lease and Paragraphs 5 and 9 of the original lease.
The defendants contend, pursuant to Paragraph 5 of the original lease, that the plaintiff is required to keep the grounds of the premises clean and free of obstruction, snow and ice. In addition, the defendants contend that the plaintiff, under Paragraph 9 of the original lease is responsible for building repairs. Again, these obligations are the responsibility of the defendants pursuant to Paragraph 1 of the sub-lease and paragraphs 5 and 9 of the original lease.
The defendants assert that the plaintiff failed to address these problems. Relying on Paragraph 11 of the original lease, the defendants assert that their obligation to pay monthly rent is excused until the plaintiff corrects these conditions. Paragraph 11 provides that, "should the premises be rendered untenable and unfit for occupancy, but yet repairable within 90 days from the date of damage, the landlord may enter and make repairs with reasonable speed, and the rent shall not accrue after the date of damage or while repairs are being made but shall recommence immediately after the repairs are completed." Assuming in arguendo that the plaintiff is obligated to correct these conditions, the defendants have failed to prove that the premises are untenable and unfit for occupancy. The defendants' second special defense does not have merit.
The defendants have proved that there were minor problems with the roof after it was replaced in early January 2004 and they have established some problems with the picture window. However, considering the entire evidence, these problems do not render the premises untenable.
The defendants contend that because they are unable to use the basement floor, the value of the leased premise is reduced to one half. Richard Tarro testified that it was their intent to continue they showroom into the lower floor. The sub-lease is silent regarding the intended use of the lower floor as part of the showroom space for the defendants' business.
During its tenancy, the plaintiff used the lower floor to repair motorcycles and to sell accessories for the motorcycles. The defendants' past use of the basement floor during the tenancy is inconsistent with their present contention regarding the use of the lower floor. Richard Tarro testified that the basement floor was being used for the storage of furniture since December 2004. Santoro, the fire chief, testified that the defendants were using the basement floor as a "storage area" and to refinish furniture.
The defendants' third special defense has no merit. The third special defense is actually a series of special defenses. The defendants were given possession of the premises before December 1, 2003 when the key to the premises was picked up by Richard Tarro. No credible evidence was offered that the defendants intended to commence their business operations in December 2003.
In the sub-lease, the plaintiff agreed to be responsible for the roof. A new roof was placed by the owner on the building where the demised premised are located. The roof is warranted and has been repaired on several occasions. The defendants failed through credible evidence to prove that the roof continues to leak.
After the new roof was in place, the defendants continued to complain about roof leaks. Brian O'Connor, the chief building official for the town of Wethersfield, testified that he inspected the new roof for leaks and that he could not find signs of roof leaks. He testified that a ceiling tile was wet, but he found no sign of roof leaks. In April 2004, O'Connor met with roofers and at that time he did not see an active leak. The ceiling tile was dry.
In the sub-lease, the plaintiff agreed to be responsible for the roof. A new roof was placed by the owner on the building where the demised premised are located. The roof is warranted and has been repaired on several occasions.
The plaintiff was not required to remedy the leaks in connection with the picture window in the front of the building. There, the plaintiff was required to contact the installer of the picture window. The defendants have failed to prove, by credible evidence, any damages because the plaintiff's failure to contact the installer of the picture window. Mark W. Wagner, president of the plaintiff corporation, testified that the picture windows were repaired when the roof was replaced by Diamond, Inc. However, Raymond Guntulis verified that one of the front window leaks in two places.
The building code and health code violations are not the obligation of the plaintiff to remedy. The defendants have failed to prove, by credible evidence, that the premises are unfit for the use for which they were intended. In addition, the defendants have failed to prove by credible evidence that the plaintiff breached its obligations to deliver the premises pursuant to the terms of the lease.
In their counterclaim to the amended complaint, the defendants repeat some of the same allegations as in their special defenses. The credible evidence establishes that the defendants would open their store starting in January 2004 and that they would use the month of December to set up their business. By January 12, 2004 the new roof had been placed on the building where the premises are located. The plaintiff delivered the premises to the defendants as had been inspected by Richard Tarro who knew or should have known of the roof leaks. Richard Tarro testified that he replaced all of the ceiling tiles in the premises before commencing the operation of the business because the ceiling tiles were damaged and stained.
The defendants allege that the premises are uninhabitable due to the leaks from the roof and the picture window. Habitability applies to tenants residing in dwellings. Johnson v. Fuller, 190 Conn. 552 (1983). Here, the question is whether the defendants were able to conduct their business while in possession of the premises. It is clear that they were able to sell merchandise and conduct their business since their occupancy of the premises. In addition, the defendants have failed to establish, by credible evidence, that there was a diminution of their business sales and profits as a consequence of the leaks from the roof.
The building code and health violations are not the responsibility of the plaintiff. Therefore, the alleged inability to use the lower level because of alleged the health and building code violations is not a violation of the terms of the sub-lease between the parties.
The only remaining issue presented by the defendants in their counterclaim is whether they are entitled to damages because of the leaks from the roof. Richard Tarro testified that some merchandize was damaged by leaks from the roof.
In the sub-lease, the plaintiff, as sub-lessor, took responsibility for the roof. In the original lease, the plaintiff, as tenant, was responsible for the roof. The evidence establishes that the old roof leaked prior to the replacement of the roof by the owner of the premises in early January 2004. Because the ceiling tiles were replaced by the defendants at the start of the tenancy, the parties were aware of the leaks with the old roof. The plaintiff acted promptly in addressing the leaks coming from the roof.
In December 2003 the defendants notified the plaintiff that the roof was leaking into the demised premises. The defendant, Elegant Living, informed the plaintiff that the replaced ceiling tiles had been damaged. In addition, Elegant Living informed the plaintiff that the hardwood floor had been cleaned and refinished and that it had been damaged by the leaking roof. Elegant Living complained that two rugs had been water stained as a result of the leaks from the roof. Richard Tarro testified about the different items of merchandize that were damaged during the defendants' tenancy. The list of merchandise is described in Exhibit GGG. Photographs were introduced corroborating the damage to these items. Richard Tarro testified that the items of personal property listed on pages 1, 2, and 3 were damaged or destroyed during the installation of the new roof by Diamond, Inc (Ex. GGG, pages, 1, 2, and 3). On page 4 of the same exhibit, the defendants list two rugs claimed to be permanently damaged by roof leaks. On page 5 of the same exhibit, five rugs were cleaned and deodorized for $1,000.00 after they became wet or soiled. The defendants did not present an independent appraiser regarding their alleged damages.
The court is not convinced that the stained rugs have no value. There was no independent appraiser to value the rugs. The court does not credit the testimony of Richard Tarro regarding the defendants' damages except for the cost of cleaning and deodorizing five rugs. The court finds no merit to the claims by the defendants except for the $1,000.00 to clean and deodorize five rugs.
The damage caused by the installation of the new roof was an independent cause and, therefore, the plaintiff is not liable for the damage to the defendants' merchandize by the installers of the new roof. In addition, the sublease between the plaintiff and the defendants did not contemplate the installation of a new roof which was the obligation of the owner of the premises as was admitted by the owner.
Judgment for the plaintiff for unpaid rent and attorney's fees on its amended complaint. The defendants failed to pay the $400.00 balance for rent due for the month of January 2004. The total rent owed by the defendants through December 2005 is $83,200.
Judgment for the defendants on the defendants' counterclaim in the amount of $1,000.00. The court finds no merit to the other claims made by the defendants in their counterclaim.
The plaintiff seeks attorney's fees and costs from the defendants in connection with the two summary cases and this case, as provided in the sublease. The plaintiff paid its attorney, $3,000.00 in attorney's fees and $697.55 in costs in connection with the first summary process case. In addition, the plaintiff paid its attorney $3,200.00 in attorney's fees and $3,729.90 in costs in connection with the second summary process case. The defendants seek attorney's fees and costs for the first summary process case and this case. Paragraph 13 of the sub-lease provides that:
13. In the event litigation is commenced as a result of a breach of this agreement, the prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs of the action.
Our Supreme Court and this court, in construing various statutory fee shifting provisions, repeatedly have cited favorably the following definition of a prevailing party: "[A] party in whose favor a judgment is rendered, regardless of the amount of damages awarded. . . ." (Emphasis added; internal quotation marks omitted.) Frillici v. Westport, 264 Conn. 266, 285, (2003) Russell v. Russell, 91 Conn.App. 619 (2005)
The court in Russell v. Russell further defined this principle:
"Generally, costs may be awarded to a successful party-plaintiff as the prevailing party where there is success on the merits of the case although not to the extent of the plaintiff's original contention, or where the plaintiff is not awarded the entire claim. A party need not prevail on all issues to justify a full award of costs, and it has been held that if the prevailing party obtains judgment on even a fraction of the claims advanced, or is awarded only nominal damages, the party may nevertheless be regarded as the `prevailing party' and thus entitled to an award of costs." 20 Am. Jur. 2d, Costs § 14 (1995). Russell v. Russell at page 651, supra.
The first summary process case was dismissed after a successful motion to dismiss was filed and argued by the defendants. There, the notice to quit possession was ruled defective. In the first summary case, neither the plaintiff nor the defendants were the "prevailing party" as articulated in Russell v. Russell because the dismissal was not based on the merits of the case.
A judgment for possession of the premises was granted to the plaintiff after trial in the second summary process case. In that action, the plaintiff was the "prevailing party". The plaintiff is awarded $3,200.00 in attorneys' fees and $729.90 in costs.
The plaintiff is the prevailing party on the amended complaint in this action. The plaintiff is awarded $12,480.00 or 15% of the judgment in attorney's fees because of the length and complexity of this case.
The defendants are the prevailing parties in their counterclaim. The defendants are awarded $150.00 or 15% of the judgment in attorney's fees.
The net judgment to the plaintiff, including attorney's fees for this case, the attorney's fees and costs for the summary process action totals $98,459.90. This amount is due to plaintiff's attorney as trustee no later than January 3, 2006.