Opinion
No. CV18-9808
May 16, 2005
MEMORANDUM OF DECISION
I. NATURE AND HISTORY OF THE PROCEEDINGS
This is a summary process action in which the plaintiff (hereinafter sometimes referred to as the "landlord") is seeking the immediate possession of the land upon which, and the building thereon in which, the defendant (hereinafter sometimes referred to as the "tenant"), operates his commercial auto dealership and repair business.
In his complaint filed on November 5, 2004, and in his notice to quit, that was served on the defendant on October 6, 2004, the landlord alleges that the tenant breached the written lease agreement executed by the parties in several respects, in that he performed auto body work on the leased premises; failed to carry the requisite insurance coverage; failed to provide the landlord with his insurance policies; did not pay certain utility bills; failed to adequately heat the premises; filed a false claim with the landlord's insurance carrier, without notification to the landlord; and failed to keep the premises in a proper, neat, clean and safe condition.
On December 13, 2004, the defendant filed his answer that denied each and every allegation that he breached the lease and a special defense that the reasons alleged in the notice to quit were not within the scope of General Statutes section 47a-23, the summary process statute. The special defense, however, lacks any specificity. On December 16, 2004, the plaintiff filed his "answer" that denied the special defense.
Immediately prior to the commencement of trial, the defendant filed two separate motions to dismiss, both of which were addressed by the court prior to hearing any testimony. On January 10, 2005, the defendant asked the court to dismiss the action due to the landlord's failure to issue the pre-termination notice required by General Statutes section 47a-15, which provides, in pertinent part:
Prior to the commencement of a summary process action, except in the case in which the landlord elects to proceed under sections 47a-23 to 47a-23b, inclusive, to evict based on nonpayment of rent, on conduct by the tenant which constitutes a serious nuisance or on a violation of subsection (h) of section 47a-11, if there is a material noncompliance with section 47a-11 which materially affects the health and safety of the other tenants or materially affects the physical condition of the premises, or if there is a material noncompliance by the tenant with the rental agreement or a material noncompliance with the rules and regulations adopted in accordance with section 47a-9, and the landlord chooses to evict based on such noncompliance, the landlord shall deliver a written notice to the tenant specifying the acts or omissions constituting the breach and that the rental agreement shall terminate upon a date not less than fifteen days after receipt of the notice.
(Emphasis added.)
The court ruled that the above section did not apply to commercial leases, citing Hoban v. Masters, 36 Conn.Sup. 611, 613 (1980) and Curnan v. Newton, Judicial District of Litchfield, DN CV97-185916 (August 15, 1997; 20 Conn. L. Rptr. 317 (Pickett, J.). On January 15, 2005, the defendant moved for a dismissal on the ground that the landlord's attorney "issued" the summons prior to the expiration of the date provided in the notice to quit for the tenant to vacate, in violation of the requirements imposed by General Statutes section 47a-23(a). The landlord's attorney signed the summons and complaint on the quit date, which was October 29, 2004, however, it was sent to the state marshal on November 1, 2004 and not served on the tenant until that day, three days after the quit date. Following Judge Levin's ruling in DaRos v. Capello Trucking Co., 1997 Ct.Sup. 11137, 21 CLR 454, Judicial District of New Haven (Housing Session), this court found that the date that the process was "issued" was when the writ, summons and complaint was forwarded to a proper officer for service, i.e., November 1, 2004. The motion to dismiss was, therefore, denied.
The trial was held on January 11 and January 12, 2005, during which the court heard testimony from each of the parties and received thirteen exhibits into evidence, three for the plaintiff and ten from the defendant. At the conclusion of the trial, after counsel had concluded their arguments and the court made certain dispositive findings, a briefing schedule was agreed to; the court received the last brief on March 9, 2005.
II. PREVIOUS FINDINGS ON THE RECORD
Once argument had concluded, the court found that the plaintiff had failed to establish his claim that the defendant had breached the lease relative to the alleged auto body operation, the failure to pay utilities, the failure to adequately heat the premises and the alleged failure to maintain the leased premises in a proper, clean safe and neat condition. The court articulated its findings on each of those specific allegations. The court informed counsel that there was insufficient evidence and that the court was unable to meaningfully draw the distinction between "garage" liability and "public" liability insurance, however, the court also informed counsel that the meaning of those insurance terms was not the issue; the issue was whether the tenant's undisputed failure to provide the landlord with original insurance policies at the beginning of each lease year, constituted such a significant or material breach of the tenant's obligation as to justify termination of lease and the tenant's eviction. The court also informed counsel of its concern as to the facts and circumstances surrounding an insurance claim made by the tenant under the landlord's insurance policy, as a result of water damage to the leased premises. During its remarks, the court asked counsel to brief the following issues:
(1) Given the fact that, in the event of a ruling adverse to the tenant, he would have to shutdown his business and move it from the leased premises, should the breach by the tenant of the policy delivery obligation mandate such a result?
(2) Should the landlord's delay, in seeking the termination of the lease, due to the tenant's failure to comply with his policy delivery obligation, upon which, given the paucity of evidence on the other claims, the landlord's summary process action is largely based, preclude the landlord from enforcing his right to do so, pursuant to other provisions of the lease?
(3) In order for the court to grant the landlord the relief requested, the eviction of the tenant, must the court find a material breach of the lease?
(4) What application, if any, does the implied covenant of good faith and fair dealing have to the facts and circumstances of this case?
As hereinafter addressed, the parties did submit post-trial briefs that, for the most part, dealt with the issues that were the expressed concern of the court. The defendant briefed an issue relative to the ownership of the leased premises, in addition to language ambiguity, and introduced the concept of an "implied co-insured." Each of those issues were responded to by theplaintiff.
Neither of the parties, from a legal perspective, addressed the landlord's delay in enforcing the policy delivery provisions, the so-called "laches" issue. The defendant did not specifically respond to the plaintiff's position on the equitable forfeiture issue.
The court has attached to this memorandum an Appendix, which is the portion of the transcript dealing with the court's briefing requests.
III. FACTUAL BACKGROUND A. Relevant Lease Provisions
The lease signed by the parties, each in his individual capacity, is entitled, "Business Lease," which is a pre-printed Blumberg form commercial lease. The document is Plaintiff's Exhibit # 2 and is dated May 10, 2002. The plaintiff is named as the Landlord and the Tenant is designated as, "Innovative Motors, Glenn Kurrus dba Paradise Garage." The premises is located at 438 Limerock Road, Limerock, Connecticut. Although not specified in the lease, the leased premises consists of the commercial portion of the building only and the two and one-half acre parcel of real property upon which the building was constructed. The residential portion of the building remained in the exclusive possession of the landlord, who occupied the apartment two to three times a month, while visiting Limerock, particularly during the racing season. The landlord is a resident of New Jersey. The portion of the building leased by the tenant consists of a 3000-square-foot showroom and a 1000-square-foot work/repair area. The term of the lease is five years, commencing June 1, 2002 and expiring May 31, 2007. The rental is $2000 per month, however the tenant was obligated to pay only $1500 a month during the first year, as it was anticipated that the tenant would repair and/or remodel the ceiling, floors, showroom and front facade of the building at his expense. The tenant was to use the leased premises for "auto sales and repairs." Although the obligation of the tenant to "maintain appropriate insurance" was handwritten into the lease, the pre-printed portion, wherein coverage amounts are to be inserted, was left blank. As to the insurance issue, Paragraph #6 provides as follows:
Liability Insurance
The Tenant shall obtain, pay for and keep in effect for the benefit of the Landlord and the Tenant public liability insurance on the Rental Space. The insurance company and the broker must be acceptable to the Landlord. This coverage must be in at least the minimum amounts stated above.
All policies shall state that the insurance company cannot cancel or refuse to renew without at least 10 days written notice to the Landlord.
The Tenant shall deliver the original policies to the Landlord with proof of payment of the first year's premiums. This shall be done not less than 15 days before the Beginning of the Term. The Tenant shall deliver a renewal policy to the Landlord with proof of payment not less than 15 days before the expiration date of each policy.
Emphasis added.
Paragraph #19 imposes the obligation on the tenant to notify the landlord "at once" of any fire or other casualty. Although Paragraph #9 excuses the tenant from any liability resulting from any act or neglect of the landlord, Paragraph #8 provides that the landlord shall not incur any liability as a result of "the leak or flow of water from or in any part of the building." Emphasis added. Paragraph # 14(k) requires the tenant to "promptly notify the Landlord when there are any conditions which need repair." Emphasis added. Paragraph # 18 gives the landlord the right of access to the leased premises, upon reasonable notice to the tenant.
Paragraph #23 grants to the landlord the right to re-enter the leased premises (Rental Space) in the event that "the Tenant violates any agreement in this Lease." Emphasis added. That right is to be exercised via "eviction" and is to be preceded by "the notice required by law," which is the statutorily mandated notice to quit. Paragraph #25, entitled "No Waiver," provides:
The Landlord's failure to enforce any agreement in this Lease shall not prevent the Landlord from enforcing the agreement for any violations occurring at a later time
Emphasis added.
B. The Relationship Of The Parties
As noted, the parties commenced their landlord-tenant relationship in May 2002. Apparently, for a year and a half, it was an amicable relationship, as both were car enthusiasts and belonged to the same automobile club, whose members owned vintage vehicles. There was some evidence that the plaintiff was permitted by the defendant to use the showroom to display several vintage automobiles owned by the plaintiff that he had hoped to sell. The relationship, however, deteriorated to one of mutual distrust and hostility that culminated in a letter dated September 2, 2003, from the plaintiff to the defendant. Defendant's Exhibit #4. In that letter, the plaintiff expressed his regret that he leased the building to the defendant, but acknowledged his continuing obligation as a landlord under the lease. The plaintiff, however, informed the defendant, "I choose to have no relationship whatsoever with you." The plaintiff instructed the defendant that "all communications should go through Dick [Hyland]," who was a mutual acquaintance and fellow member of the auto club. The plaintiff offered to sell the land and building to the defendant for $600,000, however, the offer was good for five days only. It was, obviously, not accepted. The plaintiff ended the letter with the following admonition: "You and I don't speak the same language."
The relationship between the parties appeared to have seriously deteriorated sometime prior to the plaintiff's letter, as the plaintiff testified that there were lawsuits over race car issues and that he was told by his tenant to "get off the property." According to the plaintiff, the relationship became so acrimonious that the resident state trooper advised the plaintiff to avoid all contact with the defendant. During his testimony, the defendant admitted that since Labor Day 2003, he initiated no direct contact with his landlord. The plaintiff has not been inside the leased premises since September 2003!
C. The Bursted Pipe
Given the animosity and the cessation of direct contact between the parties, the countercharges and the increased hostility that resulted from the bursted pipe incident was predictable. On January 27, 2004, the tenant observed water flowing over the showroom floor and heard a "gushing" sound, whose origin appeared to be the landlord's residential apartment. Water was coming from the ceiling and the wall that divided the residential from the commercial portion of the building. The defendant immediately called the mutual acquaintance, who called the landlord, who called the prior tenant, who had a key; the water was not turned off until one hour after the condition was first discovered by the defendant. Just who called the plumber was not clear from the testimony, however, the tenant insisted that the plumber send the bill, in the amount of $183.95, to the landlord. The plaintiff claims that the pipe broke in the showroom area, while the defendant attributes the problem to the residential area of the building.
The plaintiff testified that he paid the plumbing bill. Five months after the water incident, the plaintiff received a check in the amount of $6,700, that was issued by his insurance company, apparently as compensation for water damage to the leased premises. The plaintiff, however, never filed a claim with his insurance carrier. The defendant testified that he contacted the landlord's insurance company and reported the casualty, as it was a ceiling and carpet installed by the tenant that was damaged. The defendant produced no estimate of the damage at the trial and testified that the insurance adjuster simply drove to the building, when it was not open for business, peered through the window and approved a $6,700 claim! The defendant had no knowledge that the check was sent to the landlord, until he contacted the adjuster, who informed him that the landlord had received the check one month earlier. The defendant testified that he did not inform the adjuster at any time that the plaintiff-landlord was unaware of his claim.
Upon discovering that the landlord had apparently retained a check to which, the tenant believed, he was entitled, the tenant made a formal complaint to the resident state trooper, seeking the arrest of a landlord for larceny. Upon receipt of the check and upon the realization that the tenant filed a claim under his insurance policy and neither informed the landlord of the nature of the casualty nor of the filing of a claim, the landlord exhibited the check to the police, who, at the time of trial, were investigating the tenant for insurance fraud.
D. The Insurance Coverage
The plaintiff claims that the defendant, throughout the lease term, has failed to obtain the insurance coverage required by Paragraph #6 of the lease. Specifically, the plaintiff claims that he first received a copy of an insurance certificate evidencing the defendant's insurance coverage in January 2005. Plaintiff's Exhibit #1. The coverage indicated on the insurance certificate was and is unacceptable to the landlord, as the tenant had obtained "garage liability" coverage only and not the "public liability" insurance required by the lease, which the landlord believes is the equivalent of "general liability" insurance, that should provide coverage for fire, theft and other casualties. The plaintiff testified that no policy was ever submitted to him by the defendant nor was his approval, as landlord, ever sought by his tenant. The defendant testified that he remembers showing the plaintiff his insurance policy "one time" when the plaintiff was dropping off one of his cars, an allegation that the plaintiff flatly denied.
An examination of the court file reveals that the defendant, by stipulation, was ordered by the court to provide proof of his insurance coverage to the plaintiff on or before December 17, 2004.
The defendant produced Defendant's Exhibits #7, #8 and #9, each of which are policy declaration sheets, evidencing the insurance coverage obtained for a one-year period. The exhibits cumulatively are for the period June 22, 2002 (a date nearly two months after the effective date of the lease) to June 26, 2005. The policy in effect for each of the three years provided for Garage Liability, Garage Keepers, Garage Physical Damage, Medical Payments and Errors and Omissions coverages. There is no mention of Public or General Liability coverage, however, each policy was supplemented by one million dollars worth of Umbrella coverage. It is noteworthy that in none of the three declaration sheets is the landlord mentioned as a "Designated Person" or as an additional insured, however, the certificate of insurance ( Plaintiff's Exhibit #1), that relates to the policy currently in force, does name the plaintiff as an "Additional Insured" and does provide that he, as landlord, is entitled to a ten-day cancellation or non-renewal notice. That certificate was dated December 17, 2004 and was prepared in response to the court order.
The certificate indicates that the following limits are currently in effect:
Garage Liability................... auto, premises, operations
Per Person Bodily Injury $ 20,000
Per Accident Bodily Injury $ 40,000
Per Accident Property Damage $ 10,000
Aggregate $ 100,000
Umbrella $1,000,000
Although the defendant professed to have coverage for "Public Liability," that term is nowhere to be found in the insurance exhibits. The insurance certificate specifically excludes, by omission, "General Liability" coverage from the defendant's policy. The defendant claims that the insurance coverage purchased by him for his business was that required by the department of motor vehicles, which issues the license that enables him to operate the business. The defendant admitted that he had "no discussion" with the plaintiff as to the type or amount of insurance required by the lease. The defendant claims that, at all times during the lease term, he believed that he had "appropriate insurance," within the meaning of the hand-written clause on the first page of the lease.
IV. THE CLAIMS OF THE PARTIES A. The Core Issue
As earlier noted herein, the plaintiff, in his notice to quit and in his complaint, alleges that the defendant violated several lease provisions related to auto body work, the tenant's utility obligations, the failure to attend to the maintenance and upkeep of the leased premises and the insurance issues all of which, contrary to the defendant special defense, present an appropriate basis for a summary process action pursuant to C.G.S. Section 47a-23(a)(1)(C), which permits the landlord to initiate a summary process action based upon a "violation of the rental agreement."
As also noted, the court articulated the reasons for finding in the defendant's favor on all but the insurance issues. The court found that based upon one isolated incident of hanging fenders, the plaintiff failed to prove that the defendant was operating an auto body business. Although the plaintiff claimed that he paid certain utility bills that were the defendant's responsibility, no bills were presented and no specifics were given. As noted, there was conflicting evidence as to the source of the bursted pipe, that the plaintiff attributed to the defendant's failure to heat the premises in the winter, however, the more credible evidence was that the pipe that failed was located in the residential portion of the building. As to the plaintiff's claim that the defendant failed to maintain the leased premises in a neat, proper and safe manner, the photographs introduced by the defendant (Defendant's Exhibits # 1 and #2) depict what the court referred to as a "class operation." The plaintiff was unable to demonstrate that debris littered the grounds or that abandoned automobiles were stored on the premises.
Thus, as stated by the court on the record, the core issue appeared to be that occasioned by, not as much by the debate over the garage versus the public liability insurance, but by the tenant's undisputed failure to comply with the requirements of Paragraph #6 of the lease relative to liability insurance coverage. The court queried whether such breach on the part of the tenant necessarily mandates that the court grant to the landlord the relief requested, which, if granted, would require the defendant to seek another location for his business in 2005, instead of two years hence, when the lease would terminate by lapse of time and would, most assuredly, not be renewed by this landlord. The court instructed counsel to brief the issues of "laches" and "material breach" and the role, if any, of the implied covenant of good faith and fair dealing.
B. The Plaintiff's Claims
The plaintiff claims that there is no dispute that the defendant breached the lease by his failure to comply with the requirements of Paragraph #6. He further claims that, given that breach, the plaintiff, as the landlord, had a right, pursuant to Paragraph # 23, to evict the defendant via summary process. The plaintiff argues that a lease is a contract and is subject to the rules applicable to the interpretation of contracts, thus the landlord had a contractual right to terminate the tenancy, as a consequence of the tenant's failure to comply with the policy delivery requirements of the lease agreement.
The plaintiff also argues that the equitable defense of relief from forfeiture, which has been applied to certain summary process actions, cannot be considered by this court, as it was not raised or pleaded by the defendant. The defendant chose not to address this issue in his brief. From an equitable perspective, however, the plaintiff expresses great concern over the "grave consequences" that might be precipitated by the continuance of the parties' relationship in light of its very conflicted current status.
C. The Defendant's Position
In his trial brief, the defendant argues, inter alia, that the named individual plaintiff is not the owner of the leased premises and, therefore, cannot legally bring this summary process action. In addition, the defendant argues that the lease provisions, the alleged violation of which forms the basis of the plaintiff's action, are ambiguous, incomplete and, therefore, ought to be resolved in the defendant's favor. Moreover, the defendant argues that the failure of the defendant to deliver the insurance policies as required by Paragraph #6 of the lease, did not constitute a material breach of the lease, as no substantive rights of the plaintiff were adversely affected, in that the defendant maintained the appropriate insurance coverage throughout the lease term. As noted, the defendant argues that the plaintiff's attempt to evict him due to a dispute over ambiguous lease covenants is violative of the implied covenant of good faith and fair dealing. Finally, the defendant argues that his conduct, vis-a-vis the insurance claim controversy, was justified and appropriate, as the defendant was an "implied insured" under the plaintiff's insurance policy.
The defendant first raised the issue of ownership in his final argument, more than two months subsequent to the filing of this action, a jurisdictional issue that would have been more appropriately raised earlier by a motion to strike or a motion to dismiss.
D. The Plaintiff's Response
In response to the defendant's argument that the plaintiff is not the owner of the leased premises, the plaintiff, while admitting that allegation, asserts that the evidence demonstrates that the plaintiff is the beneficial owner, as that term is employed in statutory and case law, and as such, has the right to prosecute this action. In his response to the materiality issue, the plaintiff argues that the failure of the defendant to provide the plaintiff with proof of proper insurance coverage was a material breach; the defendant's policy delivery obligation was not negated or cured by differing interpretations by the parties as to the phrase, "public liability insurance." The plaintiff asserts that the defendant possesses no right under Connecticut law to deem himself a coinsured, implied or otherwise, under the plaintiff's insurance policy and, if the implied covenant of good faith and fair dealing applies at all to the facts and circumstances of this case, the equities favor the plaintiff, according to the plaintiff, it is the defendant's bad faith that the court should examine.
V. THE LEGAL ISSUES A. Ownership
The person designated as "Landlord" under the lease and whose individual signature is affixed thereto as "Landlord" is "Frank Gallogly," who is also the person who is the named plaintiff in this summary process action.
During the trial, the defendant introduced several exhibits that established that the land and building occupied by the defendant is titled in the name of Paradise Garage Associates, Inc. Defendant's Exhibit #5 is a warranty deed dated August 2, 1988, to that corporate entity from William L. Mayberry. Defendant's Exhibit #6 is a trade name certificate of the same date, attesting that said corporate entity was conducting business as "Paradise Garage at Lime Rock Park" at the leased location. The certificate was signed by Paul B. Reisman, as president of that corporation. In May 2002, as part of the transaction whereby the defendant entered into possession of the leased premises, the defendant signed a trade name certificate under the designation "Evolution Motorsports, L.L.C., dba Paradise Garage." Defendant's Exhibit #10. The defendant testified that he operated his business as Paradise Garage, L.L.C. As the defendant pointed out, the individual name of the plaintiff does not appear on any of the three referenced in exhibits.
The plaintiff testified that the original corporation became defunct, however, he had the corporation reinstated through the office of the secretary of the state in April or May 2004. At all times from the initial negotiations of the lease, throughout the nearly three-year landlord-tenant relationship that has existed between the parties, up to and including the trial, the plaintiff claimed to be the owner of the leased premises and was viewed as such by the defendant. The plaintiff referred to the corporate owner of the leased premises as "my company." Moreover, when the defendant instructed his insurance carrier to designate an additional insured on the certificate of insurance, that was presented to the plaintiff in December 2004, it was the plaintiff's name and his New Jersey address that was inserted. See Plaintiff's Exhibit #1.
The defendant argues that the plaintiff is neither the "owner" nor "lessor," as those terms are used in General Statutes section 47a-23, however, the definitional section of the summary process statutory scheme defines "owner" as:
One or more persons, jointly or severally in whom is vested . . . (2) all or part of the beneficial ownership and right to present use and enjoyment of the premises.
(Emphasis added.)
General Statutes section 47a-1(e).
A beneficial owner is defined as "[o]ne who does not have legal title to property but has rights in the property which are the normal incident of owning the property" and as one who is an
"[e]quitable as contrasted with legal owner." Black's Law Dictionary (5th Ed., 1979).
Black's 7th Edition (1999) defines a "beneficial owner" as, "One recognized in equity as the owner of something because use and title belong to that person, even though legal title may belong to someone else."
Craig v. Mohyde (CV94-03 16056 5), (April 18, 1997) 1997 Ct.Sup. 3960.
In a recent case, Western Boot Clothing v. L'Enfance Magique, 81 Conn.App. 486 (2004), Judge Dranginis, writing for the majority, held that a commercial sub-lessor was a proper person to bring a summary process action, due to his legally recognizable beneficial interest in the leased property. The appellate court observed that the defendant, who was the sub-lessee, was in no way confused or prejudiced by the fact that legal title to said property was in the name of someone other than the plaintiff. Id., at page 491.
In this case, the defendant, at all times, knew that the plaintiff, who was the sole person with whom he negotiated the lease and the person to whom he sent the monthly rental checks, was the de facto owner and the person who had sole dominion and control of the leased premises. This court finds that in such capacity, the plaintiff had the legal right and standing to institute and prosecute this action.
B. The Materiality of the Breach-The Insurance Issue
Although the parties continued to disagree as to the meaning of "public liability insurance," as the phrase appears in Paragraph # 6 of the lease, and continued to debate the issue as to whether the defendant placed and kept in force the requisite insurance coverage, there is no disagreement that the defendant did not comply with the policy delivery provisions of the lease.
As earlier noted herein, the court is unable to resolve the disagreement over the type of insurance, as there was no meeting of the minds of the parties on that issue and there was no expert or competent testimony that meaningfully explained the difference between "public liability" and "garage liability" insurance. What is clear is that the parties' behavior relative to insurance matters lies at the core of their conflicted and hostile relationship and escalated that conflict to a point where each attempted to procure the arrest and criminal prosecution of the other. The failure of the defendant to comply with the specific requirements of Paragraph #6, that obligated him, as the tenant, to provide the landlord, each year, with his insurance policy, precluded the landlord from examining the policy, assessing both his and the tenant's coverage and initiating, either directly or indirectly, the necessary communication, so that each party would be aware of the other's insurance coverage and responsibilities relative thereto, long before the bursted pipe incident, that resulted in a permanent destruction of their relationship. Given the facts and circumstances surrounding the insurance issue, including the filing of the claim by the tenant without notification to the landlord; the questionable insurance adjusting process; the delivery of the check received by the landlord to law enforcement authorities; and the conflicting claims of larceny and criminal fraud, this court cannot find that the tenant's breach of the policy delivery provisions of Paragraph #6 was immaterial.
As noted, Paragraph #23 of the lease contract permits the plaintiff as landlord; "to re-enter the Rental Space" and, in effect, to terminate the lease, "if the tenant violates any agreement in this Lease." Paragraph #25 provides that the landlord's previous failure to enforce " any agreement in this Lease," does not preclude him from doing so for future violations. Emphasis added. Thus, had this court found that the breach by the tenant of the policy delivery provisions of the lease was not material, the plaintiff, nonetheless, would have the right, pursuant to the aforementioned lease provisions, to terminate the lease.
Paragraph twenty does, however, provide for termination of the lease by the lessor-defendants for a default by the tenant, T.H. Canty and Co., Inc., of any of the terms, conditions or covenants contained in the lease.fn1 As that paragraph expressly applies to all conditions in the lease, it clearly includes the conditions pertaining to assignment included in paragraph five. Moreover, it has long been "[t]he common method in drafting leases . . . to gather some or all of the covenants, by reference, into a condition subsequent, an agreement by the parties, that a breach by the tenant of any or all of the covenants on his part shall give the landlord the right to terminate the tenancy by means and in a manner usually indicated."
Robinson et al v. Weitz et al, 171 Conn. 545, 552 (1976)
C. Landlord's Delay In Raising the Policy Delivery Issue
The provisions of Paragraph #25, referred to above, appear to dispose of any issue of laches which, although raised by the court after counsel concluded their argument, neither party chose to brief.
D. Good Faith and Fair Dealing
It has been held and it is "now well established that a commercial lease imposes a duty of good faith and fair dealing on the landlord and tenant." Elliott v. Staron, 46 Conn.Sup. 38, 47 (1997). "Good faith performance or enforcement of a [lease] contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party." Id. "By definition, good faith and fair dealing exclude fraud and deceit and, depending on the circumstances, may exclude the recapturing of opportunities that have been legally forgone." Id., at page 48.
Obviously, the opposite of good faith is bad faith, which implies some sinister motive, dishonest purpose, ill will or furtive design. Buckman v. People Express, Inc., 205 Conn. 166, 171 (1998). The defendant argues that insurance was not an issue until the plaintiff began to search for a basis upon which he could initiate eviction proceedings and compel the removal of the defendant from the leased premises. The defendant's argument, however, ignores the fact that the plaintiff had the right to commence summary process proceedings pursuant to Paragraph #23 of the lease for the violation of any obligation undertaken therein by the tenant. It was not the landlord's obligation to seek out the tenant's insurance policies; it was the tenant's obligation to provide the policies on an annual basis to the landlord. It was the tenant's obligation, pursuant to Paragraph #19, to notify the landlord of all casualties and, pursuant to Paragraph #14, of all conditions requiring repair. Instead of coordinating his pursuit of compensation for his casualty loss occasioned by the bursted pipe, the tenant, in effect, did an end-run and by-passed the landlord, resulting in actions by both parties that escalated their mutual hostility beyond repair. Given the nature of the parties' relationship prior to the bursted pipe incident, the defendant should have complied with each and every provision of the lease contract, as any failure on his part to do so would surely jeopardize the continuation of his tenancy. Instead, the tenant chose to cease all communication and correspondence with the landlord and did not follow through with his policy delivery obligations until he was ordered to do so by the court, long after the tenancy was terminated.
The plaintiff's action in exercising his rights under Paragraph # 23 of the lease, was not occasioned by dishonesty or a sinister motive; he simply seized the opportunity that the tenant's non-compliance provided, an opportunity that, under the lease contract and under Connecticut law, he was entitled to make use of, in seeking to formally sever a commercial relationship that he no longer desired to be a part of.
E. Implied Co-Insured
For the first time in this case, the defendant argues, in his trial, brief that he, as the tenant, was an "implied co-insured" under the landlord's insurance policy and, therefore, he was within his rights to file the casualty claim arising out of the bursted pipe, despite the failure to notify the plaintiff-landlord of his actions in doing so. The defendant cites no appellate court case to support his argument, however he does refer this court to two trial court decisions; to wit, Great American Insurance Co. v. Cahill, 1997 Ct.Sup. 6437, 20 Conn. L. Rptr. 79. (Sullivan, W., J.) and Malerba v. Smith, 2000 Ct.Sup. 11051, 28 Conn. L. Rptr. 39 (Nadeau, J.). Each of those decisions dealt with the issue of whether a landlord's fire insurance carrier has a right of subrogation against a tenant as a result of payment to the landlord for fire damage to the leased premises that was negligently caused by the tenant. Both trial courts held that, absent express language in the lease that holds the tenant liable for his own negligence, the tenant is presumed to be a coinsured under the landlord's fire insurance policy, for the purposes of a subrogation action, which would not be available to the landlord's insurer. The rationals and holdings in each of the cited cases apply to fire insurance and subrogation rights only. The cited cases do not stand for the proposition that a tenant is an implied coinsured under the landlord's insurance policies for all purposes. The legal principle followed in those cases does not allow the quantum leap that the defendant wishes this court to make; i.e., by virtue of being his tenant, the defendant, for insurance purposes, was in the shoes of the plaintiff in filing for the casualty loss. Moreover, the express language of Paragraph #9 of the parties' lease does make the defendant liable, "for any loss, injury or damage to any person or property caused by the act or neglect of the Tenant or the Tenant's employees." As noted, with regard to water damage, Paragraph #8 excludes the landlord from any responsibility. The cited cases have no applicability to the facts and circumstances of this case.
F. Equitable Defenses
As noted, among the issues that the court asked counsel to address in their respective briefs was whether the breach by the defendant of the policy delivery obligation mandated the termination of the landlord-tenant relationship. The plaintiff addressed this issue in her brief by citing numerous cases that have considered equitable defenses in summary process actions, most of which involved the nonpayment of rent. The so-called equitable doctrine of relief from forfeitures is based on the principle that courts are reluctant to render a decision that results in a loss to one party that is "wholly disproportionate to the injury to the other party." Fellows v. Martin, 217 Conn. 57, 66 (1991).
In his brief dated February 1, 2005, the plaintiff, at pages 4 through 10, addresses this issue at length. The defendant, however, chose not to specifically deal with the equitable forfeiture issue, relying instead on his argument, earlier rejected by this court, that his failure to comply with the policy delivery obligation did not constitute a material breach of the lease.
Although our courts, ever since the Fellows decision, have entertained equitable defenses in summary process proceedings, they have uniformally held that such defenses must be "properly raised." Cumberland Farms, Inc v. Dairy Mart, Inc., 225 Conn. 771, 777 (1993); Kathuria v. Purcell, 40 Conn.App. 227, 233 (1996). As the plaintiff is correctly points out, the defendant neither raised the issue in the pleadings nor at the trial.
It was the court who questioned whether equitable principles have any applicability to this case.
A defendant's failure to plead a special defense precludes the admission of evidence on the subject. DuBose v. Carabetta, 161 Conn. 254, 261, 287 A.2d 357 (1971). Therefore, the defendant's failure to assert the equitable defense of relief from forfeiture in his pleadings constituted a waiver of that defense and it should not have been considered by the trial court. Although our courts are "consistently . . . solicitous of the rights of pro se litigants," the rules of practice cannot be ignored to the detriment of other parties. Connecticut Light Power Co. v. Kluczinsky, 171 Conn. 516, 519, 370 A.2d 1306 (1976); see also Higgins v. Hartford County Bar Assn., 109 Conn. 690, 692, 145 A. 20 (1929). It would be fundamentally unfair to allow any defendant to await the time of trial to introduce an unpleaded defense. Such conduct would result in "trial by ambuscade" to the detriment of the opposing party. See Manning v. Michael, 188 Conn. 607, 613, 452 A.2d 1157 (1982).
Oakland Heights Mobile Park, Inc. v. Simon, 36 Conn.App. 432, 436-37 (1994)
Anticipating, however, that the court might entertain the equitable defense, despite the defendant's failure to properly raise the issue, the plaintiff addressed the issue in his brief.
Equitable principles barring forfeiture may apply to summary process actions for nonpayment of rent if: (1) the tenant's breach was not willful 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.
Tinaco Plaza v. Freebob's, Inc. 74 Conn.App. 760, 778 (2003).
Given the insurance issue, and the civil and criminal charges and counter-charges that emanate from that issue, this court cannot find that the tenant's breach of the policy delivery obligation was not willful or, at least, grossly negligent. Although the tenant will suffer a significant loss as a result of the early termination of the tenancy, it is not, in this court's view, disproportionate to the landlord's loss, who faced a criminal investigation as a result of the insurance issue. The testimony and documentary evidence clearly demonstrate that the relationship between the parties and the injury to the landlord is irreparable. Thus, had the equitable defense relative to forfeiture been properly raised by the defendant, he would not, in this court's view, be able to prove the elements thereof by a fair preponderance of the evidence.
VI. CONCLUSION
This court finds that the defendant committed a material breach of the parties' commercial lease by his persistent failure to comply with the insurance policy delivery requirements, as provided in Paragraph #6 thereof. As a result of the defendant's breach, the plaintiff exercised the right accorded to him by a Paragraph #23 of the lease to initiate this summary process action. As per Paragraph #25, the plaintiff's right to do so was not lost by his failure to enforce the policy delivery provision prior to the present action.
THE PLAINTIFF HAS PROVEN HIS CASE BY A FAIR PREPONDERANCE OF THE EVDENCE, THEREFORE, JUDGMENT OF IMMIEDIATE POSSESSION MAY ENTER IN THE PLAINTIFF'S FAVOR.
On equitable grounds and in an effort to avoid further hostilities, the court would strongly suggest that the plaintiff consider the wisdom of refraining from seeking an early execution of this judgment. Given the fact that the defendant is now obligated to seek a new location for his auto dealership the approval of which will be subject to local and state administrative agencies, this court urges the plaintiff to permit the tenancy to continue, subject to all of the terms and conditions of the current lease, for a period of, at least, ninety days.
Wilson J. Trombley, Judge
Editor's Note Appendix not duplicated herein.