Opinion
No. BRSP-075356
September 21, 2011
MEMORANDUM OF DECISION
The plaintiff, Harborside Associates, LLC (Harborside), commenced this action on August 3, 2011 to recover possession of the premises known as 946 Ferry Boulevard, Stratford (premises) in six counts: counts one and two based on non-payment of rent and lapse of time, respectively, against the defendant, Savin Rock Roasting Company II, Inc. (Savin Rock), and counts three through six based on non-payment of rent, lapse of time, no right or privilege by one who never had a right or privilege and no right or privilege by one whose right or privilege has expired, respectively, against the defendant, 287 BS Company, LLC (287 BS). Harborside brings this action with the express authority of the United States Bankruptcy Court by order entered in a pending chapter 11 proceeding, Case No. 11-50738 (AHWS) dated June 14, 2011. At the commencement of the trial the parties stipulated that judgment of possession in favor of Harborside may enter as to 287 BS on the fifth count, no right or privilege by one who never had a right or privilege. The court so ordered and entered judgment. This matter went to trial on counts one and two of Harborside's complaint as to Savin Rock commencing on September 14, 2011.
FACTS
The court makes the following findings of fact. Harborside is a Connecticut limited liability company whose ultimate equity owners are the following six individuals: Luciano Coletta, Lorenzo Coletta, Kevin Anastasio, F. Andrew Anastasio, Jr., Gabriel Villano and Anthony Villano. These individuals are not however the members of Harborside. Rather, management and control of Harborside is comprised of a "layered structure." Harborside is owned and managed by a single member, Continuity, LLC. Continuity in turn is owned and managed one third by The covenant, LLC and two thirds by Hermanos, LLC. The Covenant, LLC is owned and managed by Kevin Anastasio and F. Andrew Anastasio, Jr. Hermanos, LLC is owned and managed by Luciano Coletta, Lorenzo Coletta, Gabriel Villano and Anthony Villano. There is no single individual designated as managing member. The court heard the testimony of Attorney Carl T. Gulliver, Harborside's attorney in the pending chapter 11 proceeding. Gulliver testified that based on all of the documentation, i.e. articles of organization and operating agreements, Harborside is managed through its members. Gulliver's testimony was corroborated by that of Attorney Anthony P. DiCrosta who represented Harborside as well as all of the other various business entities owned by the six individual equity owners at all relevant times. DiCrosta was intimately involved over a period of several years with the financing and formation of the legal relationships between the various individuals and entities, including the initial drafting of the lease in question. DiCrosta described the cumbersome process by which every business decision had to be made by the consensus of the individual equity owners.
Savin Rock is a corporation whose principal shareholder, director and officer is Anthony Villano. On December 19, 2009 Harborside, as landlord, and Savin Rock, as tenant, entered into a written lease of the premises for an initial one year term commencing January 1, 2010 and ending December 31, 2010. The premises consists of commercial space where Savin Rock operates a restaurant. The lease provides for a rental payment totaling $180,000 and is payable at the monthly rate of $15,000 on the first day of each month in advance. The lease provides for three five year options to extend. The lease is signed by Anthony Villano as the managing member of Harborside.
The court heard the testimony of Luciano Coletta that he and his other fellow equity owners had never agreed to give Anthony Villano and Savin Rock a lease for anything more than a one year term with a one year option, that Anthony Villano had no authority to sign the lease on behalf of Harborside and that he and his fellow equity owners did not know of the existence of the lease and its terms until well into the initial lease term and after Savin Rock's default. Coletta's testimony was corroborated by Attorney DiCrosta who testified that he prepared the initial draft of the lease at the direction of the equity owners with a one year initial term and a one year option, that his draft did not provide for execution by Anthony Villano as managing member of Harborside, that he did not know who altered the terms of his original draft and that he was not present when the lease was signed. Nonetheless Harborside has pleaded the existence of the lease as the operative agreement of the parties under which Savin Rock has possession of the premises and under which the rights of the parties are to be determined. Savin Rock has admitted such in its answer. The court finds the written lease to be valid and binding on the parties. Savin Rock assumed possession of the premises on or prior to January 1, 2010 and remains in possession. The court heard the testimony of Gerald Butcher who has served as the accountant for Harborside since 2003 through the present as well as accountant for the various other business entities owned by the six equity owners including Savin Rock. In the case of Savin Rock his relationship terminated in December 2010. Butcher testified and produced records showing that Savin Rock immediately defaulted in its rental obligations, failing to pay rent due for January 2010. By Butcher's accounting Savin Rock is in arrears by at least the sum of $66,346.12 for the initial one year term and perhaps by as much as $96,346.12 depending upon whether Savin Rock's claimed offsets of $30,000 against the rental payments can be corroborated. Butcher testified that Savin Rock was created in December 2010 along with another entity wholly owned by Anthony Villano known as Post Road Management (Post Road). Post Road was created by Anthony Villano to collect rents from Savin Rock as well as other tenant entities and disburse such rents to Harborside and other landlord entities. The finances and operation of Post Road are under the complete control of Anthony Villano.
With regard to the option provisions, paragraph 36b of the lease provides that in order to exercise the first of the three five year options the tenant must give "notice of its intention to so extend the terms of this lease as aforesaid, given to the landlord by a prepaid registered or certified mail, return receipt requested, on or before three (3) months prior to the expiration of the initial term of this lease. In the event that the tenant fails to provide the notice as aforesaid, then the First Option, Second Option and Third Option to extend shall be null and void and of no further force and effect. . ." Paragraph 30 provides that all notices to the landlord shall be delivered ". . . . unless delivered personally to the party to whom directed. . . .by registered or certified mail, return receipt requested. . . . To The Landlord: Harborside Associates, LLC c/o Anthony P. DiCrosta, Esq. 1948 Chapel Street, New Haven, CT 06505." Further, in the event of a holdover after the expiration of any lease term paragraph 26 of the lease provides, "In the case the tenant shall at any time hold over the said leased premises beyond the initial term . . . without the consent of the landlord, the tenant shall hold said leased premises upon the same terms and under the same stipulations and agreements as are in this instrument contained, except that the tenancy created by such holding over thereby shall be month-to-month for the monthly rental installment then in effect plus Fifty (50%) percent. No holding over by the tenant shall operate to renew or extend this lease without written consent of landlord."
The deadline for Savin Rock to have provided notice of its intent to exercise its first of the five year options would have been September 30, 2010. Savin Rock failed to provide such notice pursuant to the terms of the lease to Attorney DiCrosta. In fact Savin Rock provided no notice to DiCrosta or otherwise to Harborside or to any of its equity owners at any time before or after the deadline set forth in the lease. Savin Rock has continued to pay rent in the monthly amount set forth in the original term of $15,000. Savin Rock has not paid the amount set forth in paragraph 26 of the lease which would be $22,500 as a month-to-month holdover tenant but has continued to pay the sum of $15,000 per month.
The court heard the testimony of Anthony Villano who asserted rather defiantly that he was the managing member not only of Harborside but "of all the companies", presumably referring to all of the various business entities in which the six equity holders were involved. He stated emphatically that he believed he could act independently to legally bind Harborside. To that end Villano produced a copy of a purported notice of exercise of the first option of the lease dated September 15, 2010. The notice is addressed to Harborside and it is signed and dated by Villano as president of Savin Rock. The notice indicates it was hand delivered and acknowledgment of receipt of the notice is also signed and dated by Villano as managing member of Harborside. Villano says he served a copy of the notice on DiCrosta when he got together with him on Villano's birthday, September 28, 2010. Villano also produced his accountant, Frank Mascia, as a witness. Mascia succeeded Butcher as accountant for Savin Rock and Post Road in December 2010. Mascia offered his own opinion as to whether Savin Rock had defaulted in the payment of rent due under the lease based on his analysis of the books and records of the two entities. According to Mascia Savin Rock overpaid Harborside approximately $2,000 for the initial year lease term.
On July 22, 2011 Harborside serviced a notice to quit on Savin Rock to quit possession of the premises on or before July 31, 2011. The specified basis in the notice is non-payment of rent and, in the alternative, lapse of time. The notice provided that "[a]ll monies or payments tendered or received after service of this notice to quit shall be considered for reimbursement of costs and for use and occupancy only and will not be accepted for or as rent, with your landlord having full reservation of rights to continue with a summary process eviction action." As the court has noted Harborside commenced this action on August 3, 2011 and Savin Rock remains in possession of the premises. Further factual findings are set forth below when necessary to resolve the parties' specific claims.
DISCUSSION
"The existence of a contract is a question of fact to be determined by the trier on the basis of all of the evidence. . . . In making this determination, every reasonable presumption must be given in favor of the trial court's ruling." (Citations omitted; internal quotation marks omitted.) Aquarion Water Co. of Connecticut v. Beck Law Products Forms, LLC, 98 Conn. App. 234, 238, 907 A.2d 1274 (2006). "[A] lease is a contract, and, therefore, it is subject to the same rules of construction as other contracts. . . . The standard of review for the interpretation of a contract is well established. Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact . . . [when] there is definitive contract language, the determination of what the parties intended by their . . . commitments is a question of law. . . ." (Citation omitted; internal quotation marks omitted.) Bristol v. Ocean State Job Lot Stores of Connecticut, Inc., 284 Conn. 1, 7, 931 A.2d 837 (2007); Romanczak v. Avalonbay Communities, Inc., 122 Conn. App. 499, 507, 988 A.2d 272 (2010).
"[I]t is the trier's exclusive province to weigh the conflicting evidence, determine the credibility of witnesses and determine whether to accept some, all or none of a witness's testimony." (Internal quotation marks omitted.) Hoffer v. Swan Lake Ass'n., Inc., 66 Conn. App. 858, 861, 786 A.2d 436 (2001).
The court has weighed all of the evidence and assessed the credibility of the witnesses. The court makes the following findings. The testimony of Attorney DiCrosta and Attorney Gulliver are most persuasive on the rights of the six equity members and on the control and management of Harborside. The testimony of Harborside's accountant, Gerald Butcher is most credible on the finances of Harborside and Savin Rock, and on the issue of the rental payments made under the lease. The court discounts the testimony of Savin Rock's accountant, Frank Mascia, since he was not given complete or accurate information and records by Anthony Villano upon which to base his analysis of accounting between Harborside and Savin Rock. The court further finds that Anthony Villano had no authority to act as managing member of Harborside and that his attempt to exercise the first option to extend the lease by serving notice of the exercise of the option upon himself on behalf of Harborside fails to satisfy the notice requirements of the lease. The court finds the testimony of Anthony Villano that he also personally served DiCrosta with a copy of the notice not credible.
The court finds that the evidence and credible testimony of the parties reasonably support the following findings. Harborside and Savin Rock entered into a binding and enforceable lease for the subject premises for an initial term of one year. Savin Rock defaulted in its obligations to pay rent under the lease and owed at least the sum of $66,346.12 at the end of the initial one year term. Savin Rock failed to exercise its first option for an additional five year term. On January 1, 2011 Savin Rock's leasehold converted to a month-to-month tenancy with monthly rental payments due in the amount of $22,500. Savin Rock has further defaulted in its obligations by failing to pay the increased amount for rent due pursuant to the provisions of the lease. Harborside has duly and properly served Savin Rock with a notice to quit. Savin Rock remains in possession of the premises.
CONCLUSION
For the foregoing reasons and on the basis of the court's findings, judgment for immediate possession of the premises is entered in favor of the plaintiff, Harborside Associates, LLC, and against the defendant, Savin Rock Roasting Company II, Inc., based on the first count of the complaint, non-payment of rent.