Opinion
No. CVH-7662
May 4, 2009
MEMORANDUM OF DECISION
This action seeking injunctive relief and a declaratory judgment arises from a demand by the defendant landlord, Loring Realty Advisors VII, LLC, now known as Bishop's Corner Realty, LLC ("Loring") for the plaintiff tenant, Polo/West Hartford, LLC ("Polo") to pay for a portion of the costs of work performed on the parking lot of a commercial shopping center in West Hartford, Connecticut.
BACKGROUND
Loring is the landlord and Polo the tenant under a sixty-five year ground lease (the "Lease") dated December 9, 1965. (Plaintiff's Exhibit 1). The premises covered by the Lease is described on Schedule A of the Lease (the "Demised Premises") and consists of approximately the northerly one-half of the commercial shopping center known as "Bishop's Corner East" located at 316-340 North Main Street, West Hartford, Connecticut. Loring owns the fee interest in entire shopping center (the "Premises"). Bishop's Corner East is a unified shopping center in appearance, including the parking lot, but is divided by a lease line for purposes of establishing the legal description of the
Demised Premises. The Premises and Demised Premises are served by reciprocal parking and access easements.
Loring succeeded to the interest of Konover Associates's ("Konover") in the Lease in January, 2002, when it acquired Bishop's Corner East from Konover. Konover succeeded to the interest of Morton Realty Company, the initial landlord under the Lease. Polo is the current tenant under the Lease, having succeeded to the interest of Service Merchandise in November, 1998. Service Merchandise acquired the interest of Gam-Beck Realty, Inc., the initial tenant under the Lease.
Peter D'Addeo ("D'Addeo") is the managing member of Polo. D'Addeo acted as a consultant to Polo in connection with its purchase of the Lease in 2000 from Service Merchandise and later became the managing member of Polo in 2001. Andrew Rose ("Rose") is the managing member of Loring.
Prior to Loring's acquisition of the Premises from Konover in January, 2002, Polo was responsible for the day-to-day maintenance of the entire shopping center Premises pursuant to Section 38 of the Lease. Under the arrangement at that time, Polo utilized the services of Commercial Services Realty, a real estate management firm in which D'Addeo was a principal. Polo performed its maintenance obligations under the Lease and billed Konover, and later Loring (for a short period of time), for one-third reimbursement of the costs of maintaining the entire parking lot. For some period after Loring acquired the shopping center, Konover was retained to manage the property and utilized Polo's services for maintenance until Konover was replaced by Centercorp Retail Properties, Inc., a Loring affiliated entity.
At the time of Loring's acquisition of Bishop's Corner East, there was an ongoing dispute between Konover and Polo concerning a percentage rent provision in the Lease. To settle the issue, Loring and Polo entered into a lease Amendment dated April 24, 2002 (the "Amendment," Plaintiff's Exhibit 2). In addition to converting the percentage rent to a minimum fixed rent, the Amendment amended the original Section 38 of the Lease. Under Section 38, as amended, the maintenance obligation was transferred from Polo to Loring. Thereafter, Loring became responsible for the maintenance and billed Polo for two-thirds reimbursement of the maintenance costs.
The Amendment deleted Section 38 of the Lease and replaced it in its entirety as follows:
"(iii) Effective as of April 1, 2002, Section 38 of the Lease is hereby deleted in its entirety and replaced with the following:
Notwithstanding anything to the contrary contained in this Lease, Landlord shall insure, light and maintain all the parking areas and roadways (as the same may exist from time to time) on both the premises demised under the Lease and the premises described in Schedule C attached to this Lease in accordance with generally accepted standards in retail strip centers in the Hartford, Connecticut area similar to the demised premises, and shall keep the same free of snow, ice and debris and shall stripe the same whenever necessary and Tenant agrees to pay Landlord as its proportionate share of the reasonable third party out of pocket costs incurred by Landlord for such maintenance, lighting and insurance two-thirds of such costs within thirty (30) days after presentation of paid bills therefore (but no more often than monthly), such payment to be made as additional rent under this Lease. In the event that Landlord shall fail to keep its obligations set forth in this paragraph and such failure shall continue for more than fifteen (15) days after written notice thereof to Landlord, which notice shall specify the failure involved, [except that in the case of an emergency requiring immediate action to protect against injury to person or damage to property such time period shall be the minimum reasonable time period to cure the same (Landlord and Tenant acknowledging that under certain circumstances such an emergency may require immediate attention without the possibility of a notice or any cure period)] and in the case of any failure which reasonably requires more than fifteen days to cure, such fifteen day period shall be extended to the extent necessary to cure the same, provided that Landlord uses reasonable diligence in the pursuit of such cure), then Tenant may cure such failure at Landlord's expense and Landlord agrees to reimburse Tenant for all reasonable third party out-of-pocket costs and expenses incurred in such cure within thirty (30) days after presentation of paid bills therefore, failing which Tenant shall have as its rights under Section 18(c) of this Lease."
The Amendment was drafted by Loring's attorneys. Under the original Section 38 of the Lease and Section 38, as amended, Polo's share of the costs to maintain the entire parking lot on the Premises was two-thirds of the total cost.
Polo leases retail space north of the lease line to its tenants Whole Foods and The Hartford Medical Group. Loring leases retail space south of the lease line to Walgreens, Bertucci's and Lox, Stock Bagels.
In 2005, Loring applied to the West Hartford zoning authorities for approvals necessary to permit Loring's tenant, Walgreens, to expand its retail space and install a drive-through pharmacy window. Included in the application were plans which depicted a reconstruction of the entire parking lot.
After Loring received the Town of West Hartford's approval, the parking lot reconstruction was completed in 2007. The scope of the reconstruction work is described on Page LA-1 of Plaintiff's Exhibit 8. The work included the installation of granite curbing, planting areas, brick-banded sidewalks, landscaping and new lighting stanchions. The parking lot was reconstructed and an additional 16 parking spaces were added to the south side of the Walgreens space. Loring maintains, however, that Walgreens paid for the cost of constructing the additional spaces.
On August 27, 2007, Loring's agent, Centercorp Retail Properties, Inc. sent Polo a "breakdown of construction costs for site improvements" to the entire Premises which would be included in Polo's October quarterly invoice for common area maintenance ("CAM") charges. (Plaintiff's Exhibit 3). The breakdown was subject to "final adjustment upon completion of the work" but projected a total of $802,910.80, two-thirds of which would be Polo's responsibility and listed the construction cost components of reconstructing the parking lot, sidewalks and other appurtenances of the parking area serving the entire shopping center (the "Parking Lot Reconstruction").
When Polo received the CAM charges for 2007, D'Addeo protested Loring's classification of the expenses of the Parking Lot Reconstruction as "maintenance" under Section 38, subtracted all charges associated with the Parking Lot Reconstruction, and paid Loring the remaining CAM charges.
On October 3, 2007, Loring invoiced Polo for its third quarter CAM charges, in the amount of $456,530 for parking lot repairs.
On October 30, 2007, Polo received a demand letter dated October 24, 2007 from Loring's attorneys notifying Polo of Loring's intention to terminate the Lease in ten (10) days under Paragraph 21(a) of the Lease unless Polo paid Loring $456,530. Loring declared in the letter that if Polo did not cure its alleged default within ten (10) days, all right, title and interest of Polo in the Lease would be terminated in the same manner as if the Lease had expired at the end of its term resulting in the Demised Premises and the buildings thereon reverting to Loring.
Polo commenced this action by verified complaint dated November 2, 2007 (the "Complaint") seeking temporary and permanent injunctive relief and a declaratory judgment ruling that Polo is not obligated to pay for the Parking Lot Reconstruction costs as part of its obligation to pay maintenance costs under the terms of the Lease as amended by the Amendment. The Court entered an order granting Polo's temporary injunction and ordered that Polo post a bond securing Loring's claim ( Miller, J.). Thereafter, the parties agreed to a stay of Loring's efforts to collect the amount Loring claims as due from Polo for the parking lot reconstruction.
The parties later filed a Stipulated Order Re: Bifurcation of Trial with the court. The court granted the order, and agreed, as requested, to first hear evidence regarding the threshold issue of whether Polo is liable to Loring, under the terms of the Lease, for two-thirds ($456,530.40) of the cost of the Parking Lot Reconstruction on the Premises.
LEGAL STANDARD
A declaratory judgment action is a special proceeding under General Statutes § 52-29. See Echo Four v. Hill, 3 Conn. App. 118, 122, 485 A.2d 926, cert. denied, 195 Conn. 801, 487 A.2d 564 (1985). "The purpose of a declaratory judgment action . . . is to secure an adjudication of rights where there is a substantial question in dispute or a substantial uncertainty of legal relations between the parties . . ." (Internal quotation marks omitted.) Mannweiler v. LaFlamme, 232 Conn. 27, 33, 653 A.2d 168 (1995).
Practice Book § 17-55 provides that a declaratory judgment may be sought "in a justiciable controversy where the interests are adverse, where there is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement, and where all persons having an interest in the subject matter of the complaint are parties to the action or have reasonable notice thereof." See Milford Power Company, LLC v. Alstom Power, Inc., 263 Conn. 616, 626(2003). Also, in a declaratory judgment action, the court must decide whether "the controversy is capable or resulting in practical relief to the claimant." Id.
The sole function of a trial court in a declaratory judgment action is to ascertain the rights of the parties under existing law. Preston v. Connecticut Siting Council, 21 Conn. App. 85, 89(1990).
POLO'S CLAIMS
In support of its claim that it is not obligated to pay the costs of the Parking Lot Reconstruction, Polo relies on Sections 13(a) and 38 of the Lease. Polo also cites Section 2(b) and Schedule D of the Lease to advance its argument that the reference in Section 2(b) to Schedule D and the construction and maintenance obligations in another lease to construct parking areas on an adjacent property should be read as the parties' intention to incorporate by reference, the same obligations into the Lease for Bishop's Corner East. The court rejects Polo's argument which the court considers to be based on a tortured reading of Section 2(b) and stands in direct conflict with Section 2(d).
Polo also argues that the provision of Sections 13 and 38 do not require Polo to replace or reconstruct the parking areas and those sections only obligate Polo to pay two-thirds of the cost to "maintain" the parking areas on the Premises.
Polo asserts that there is no provision of the Lease that authorizes Loring to unilaterally replace the parking lot on the Demised Premises and send Polo the bill as a CAM maintenance charge nor is there any provision in the Lease that makes Polo responsible for any installations or replacements, except buildings as required under Section 13(a).
D'Addeo claims that prior to Loring's acquisition of the shopping center, Konover and Polo had an agreement with respect to the maintenance obligations under Section 38 of the Lease. D'Addeo dealt primarily with Larry Allen, Konover's property manager.
D'Addeo testified that Polo and Konover had a paving plan whereby the parking lot for the entire Premises would be repaved in phases over a period of seven to ten years to avoid damage which would require the reconstruction of the parking lot (the "Paving Plan"). The Paving Plan was evidenced by a color-coded map. (Plaintiff's Exhibit 7).
Polo claims that at no time did Loring put Polo on notice that it considered the Parking Lot Reconstruction chargeable to Polo as a CAM maintenance expense prior to its demand for payment.
D'Addeo testified that there was only twenty-one years remaining under the Lease and since the buildings and improvements reverted to Loring at the end of the Lease, he would never have granted any consent to Loring's zoning application nor would he have granted consent to Loring to enter the Demised Premises to do the work if he thought Polo would have to pay for two thirds of what he considered a "capital expenditure."
D'Addeo testified that Polo expended approximately ten million dollars to acquire the leasehold interest and build out the tenant space for its tenants. D'Addeo testified that at the end of the term of the Lease, the land and buildings revert to Loring and Polo would have no residual economic benefit or interest.
LORING'S CLAIMS
Like Polo, Loring also relies on Sections 2b, 13, and 38 of the Lease and urges the court to also consider Section 3. Loring argues in its post-trial proposed findings of fact and conclusions of law that Section 3 evidences that the original drafters intended the Lease to be a "net" lease.
As noted above, Rose is the managing member of Loring. In its post-trial memorandum, Loring asserts that "Mr. Rose credibly testified that these provisions [Sections 3, 2(b), 13 and 38] tied together provided the landlord Loring the basis to invoice Loring (sic)."
Loring argues that since the Amendment "switched" the "control" of the responsibility to maintain the Premises pursuant to Section 38, Loring was free to perform the Parking Lot Reconstruction without any obligation to consult with Polo or obtain Polo's approval. Loring also argues, and Polo concedes, that there is no "cap" on the costs of maintaining the parking areas and roadways in Section 38.
Loring claims that Polo's position is inconsistent because "when Polo was in charge of the maintenance for the center, it certainly had no problem invoicing Loring's predecessor Konover in January, 2002 for its one-third share of $87, 135.73 of `parking lot repairs' made in 2001 (Defendant's Exhibit A), and the basis for passing along that expenditure was paragraph 38 of the Lease." D'Addeo acknowledged in his testimony that, in some years, he billed Konover for parking lot repairs but only for items which Polo and Konover previously discussed and agreed on annually.
Loring points out that Polo "signed off' on Loring's zoning application, however, D'Addeo claimed that Polo only signed off on the application to indicate knowledge of it and would not have granted its consent to Loring's application if it knew that Loring would claim that Polo was responsible for two-thirds of the project's cost.
CONSTRUCTION OF THE LEASE
The central issue in this action is whether the language in the Lease governing the allocation of the parties' financial responsibility for the costs of maintenance and improvements to the parking areas and roadways on the entire Premises, and more specifically, the cost of the Parking Lot Reconstruction, is ambiguous or unambiguous.
"The law governing the construction of contracts is well settled. When a party asserts a claim that challenges the . . . construction of a contract, we must first ascertain whether the relevant language in the agreement is ambiguous . . . A contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself . . . Accordingly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms . . . Moreover, in construing contracts, we give effect to all the language included therein, as the law of contract interpretation . . . militates against interpreting a contract in a way that renders a provision superfluous . . . If a contract is unambiguous within its four corners, intent of the parties is a question of law . . . Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity . . ." (Citation omitted; internal quotation marks omitted.) O'Connor v. Waterbury, 286 Conn. 732, 743-44, 945 A.2d 936 (2008). The language of a contract "is unambiguous when it has a definite and precise meaning . . . concerning which there is no reasonable basis for a difference of opinion." (Internal quotation marks omitted.) Goldberg v. Hartford Fire Ins. Co., 269 Conn. 550, 559, 849 A.2d 368 (2004).
"[O]ur case law requires definite agreement on the essential terms of an enforceable agreement." (Internal quotation marks omitted.) 111 Whitney Avenue, Inc. v. Commissioner of Mental Retardation, 70 Conn. App. 692, 699, 802 A.2d 117 (2002).
When the language of a contract is ambiguous, "the determination of the parties' intent is a question of fact, and the trial court's interpretation is subject to reversal on appeal only if it is clearly erroneous." (Citations omitted; internal quotations omitted). David M. Somers Associates, P.C. v. Busch, 283 Conn. 396, 403, 927 A.2d 832 (2007).
"The rules of construction are applied only if the language of the contract is ambiguous, uncertain or susceptible of more than one construction. . . ." (Citations omitted.) Levine v. Advest, 244 Conn. 732, 745, 714 A.2d 649 (1998). Id.
"A lease is a contract. In its construction, three elementary principles must be kept constantly in mind: (1) the intention of the parties is controlling and must be gathered from the language of the lease in the light of the circumstances surrounding the parties at the execution of the instrument; (2) the language must be given its ordinary meaning unless a technical or special meaning is clearly intended; [and] (3) the lease must be construed as a whole and in such a manner as to give effect to every provision, if reasonably possible. . . . In determining the meaning and effect of the controverted language in the lease, the inquiry must focus on the intention expressed in the lease and not on what intention existed in the minds of the parties." Tinaco Plaza, LLC v. Freebob's, Inc., 74 Conn. App. 760, 767, 814 A.2d 403, cert. granted on other grounds, 263 Conn. 904, 819 A.2d 840 (2003) (appeal dismissed February 4, 2004). Accordingly, the legal principles which apply to the construction of contracts apply to the construction of the Lease.
In giving meaning to the terms of a contract, "[the court] must first ascertain whether the relevant language in the agreement is ambiguous . . . A contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself . . . Accordingly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms . . . When the language of a contract is ambiguous, the determination of the parties' intent is a question of fact . . ." (Citations omitted; internal quotation marks omitted.) David M. Somers Associates, P.C. v. Busch, supra, 283 Conn. 402-03.
"[The court] construe[s] a contract in accordance with what [it] conclude[s] to be the understanding and intention of the parties as determined from the language used by them interpreted in light of the situation of the parties and the circumstances connected with the transaction . . . The intention of the parties manifested by their words and acts is essential." (Citation omitted; internal quotation marks omitted.) McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., supra, 93 Conn. App. 502-03.
The interpretation of contract provisions is guided by well established principles of contract law. "A contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction. . . . [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and . . . the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract. . . . Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms" (Citations omitted; internal quotation marks omitted.) Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 494-495, 746 A.2d 1277 (2000).
DISCUSSION
The court must first determine if the language in the Lease is ambiguous.
SECTION 38 OF THE LEASE AS AMENDED
The Amendment provides in relevant part:
"(iii) Effective as of April 1, 2002, Section 38 of the Lease is hereby deleted in its entirety and replaced with the following:
Notwithstanding anything to the contrary contained in this Lease, Landlord shall insure, light and maintain all the parking areas and roadways (as the same may exist from time to time) on both the premises demised under the Lease and the premises described in Schedule C attached to this Lease in accordance with generally accepted standards in retail strip centers in the Hartford, Connecticut area similar to the demised premises, and shall keep the same free of snow, ice and debris and shall stripe the same whenever necessary and Tenant agrees to pay Landlord as its proportionate share of the reasonable third party out of pocket costs incurred by Landlord for such maintenance, lighting and insurance two-thirds of such costs within thirty (30) days after presentation of paid bills therefore . . ." (Emphasis added).
Loring argues that the Amendment cannot be read in isolation as advocated by Polo, but must be read in conjunction with the entire Lease. Since the Amendment was intended, in part, to modify the maintenance provisions of the Lease, a review of the provisions of the Lease and the Amendment as a whole instrument is necessary to determine whether the effect of the integration of the two documents creates any ambiguity with respect to the parties' obligations under the Lease.
Loring claims that Section 38 permits it to invoice Polo for the Parking Lot Reconstruction work as "maintenance." However, during the trial, both parties referred to the responsibility under Section 38 as the obligation to perform the "day to day" maintenance of the parking area. A fair reading of the language of Section 38 supports the view that its purpose was intended to provide the parties with a workable procedure to handle the payment and reimbursement of recurring bills. Section 38 requires Loring to "insure, light and maintain" the parking area and roadways, "keep the same free of snow, ice and debris" and to "stripe" the parking area "whenever necessary." Section 38 requires that bills submitted by Loring to Polo be paid within 30 days and limits the presentation of bills by the parenthetical "(but not more often than monthly)."
It is undisputed that the original drafters' evident objective for allocating responsibility for the maintenance of the parking area and sharing its costs under Section 38 was to achieve administrative efficiency and present the appearance of a unified shopping center at Bishop's Corner East, despite the differing ownership interests.
Under no fair reading of Section 38, does it seem reasonable to conclude that the parties intended that a $456,530 invoice be paid within 30 days and therefore it seems reasonable to conclude that the parties intended Section 38 to govern routine day to day maintenance expenses rather than major capital projects. This reading of the parties' intention is even more plausible by the addition to the Amendment of a provision not found in the original Section 38 that if the party responsible for maintenance (Loring) fails to carry out its duties under Section 38 for a period of 15 days, the other party (Polo) is permitted to "cure such failure."
Unless the parties to a lease intend to give a technical or special meaning to a term, the term must be given its ordinary meaning. Arruda Realty, Inc. v. Doyon, 35 Conn. Supp. 617, 620 (1978). The words "maintain" and "maintenance" are not defined in the Lease. The words "lighting" and "insurance" are likewise undefined in the Lease but are not in dispute.
The word "maintain" is defined in Black's Law Dictionary (8th Ed. 2004) to mean "To continue (something) . . . to care for (property) for purposes of operation, productivity or appearance; to engage in general repair and upkeep." The word "maintenance" is defined as: "The continuation of something . . .the care and work put into property to keep it operating and productive; general repair and upkeep." Id.
Webster's Third New International Dictionary (3d Ed. 1961) defines "maintain" as "To keep in a state of repair, efficiency, or validity: preserve from failure or decline." The word "maintenance" means "the labor of keeping something (as building or equipment) in a state of repair or efficiency; care; upkeep." Id. The Random House Compact Unabridged Dictionary (2d Ed. 1996) defines "maintain" as "To keep in existence continuance; preserve; retain." The word "maintenance" means" care or upkeep, as of machinery or property." Id.
Despite minor differences, the salient elements in all the common definitions of "maintain" and "maintenance" involve some degree of "continuity" and "keeping in an existing state." Nowhere in Section 38 do the words "replace" or "restore" appear.
The court finds, in accordance with the foregoing definitions, that the common and ordinary meaning of the words "maintain" and "maintenance" do not encompass replacement or reconstruction.
Since the court is required to accord the words "maintain" and "maintenance" their common, natural, and ordinary meaning, the court finds the language in Section 38 is unambiguous with respect to Polo's obligation to reimburse Loring and that Polo's obligation is limited to the cost of keeping or continuing the parking area on the Premises in a state of general repair but not the cost of replacing or reconstructing it.
SECTION 13(a) OF THE LEASE
Loring also argues that Polo is required to pay for the Parking Lot Reconstruction by Section 13(a) of the Lease.
Section 13(a) of the Lease Provides, in pertinent part, "Tenant shall, at all times during the term, and at its own cost and expense, put, keep, replace and maintain in good repair and good and substantial order and condition, reasonable wear and tear excepted, all buildings and improvements on the demised premises . . .[and] Tenant shall also, at its own cost and expense, put, keep and maintain in good repair and good order and safe condition, and free from dirt, snow, ice, rubbish and other obstructions or encumbrances, the sidewalks and curbs on, in front of, and/or adjacent to the demised premises and all roadways and parking areas on the demised premises." (Emphasis added).
It is clear that under Section 13(a) of the Lease, that Polo has a duty to "put, keep, replace and maintain" the buildings and improvements, but only has a duty to "put, keep and maintain" the sidewalks, curbs, roadways and parking areas. Had the original drafters intended that the tenant be responsible to "replace" the sidewalks, curbs, roadways and parking areas, that term would and should have been used.
Under Section 13(a) the tenant (Polo) is obligated to "keep and maintain in good repair and good order and safe condition" the "sidewalks and curbs and all roadways and parking areas on the demised premises."
West's Legal Dictionary (Special Deluxe Ed. 1986) defines "keep" as "to carry on or maintain." "Repair" is defined as "to renovate or mend. Fix, restore, improve, remedy, condition, revive, rebuild, patch, service, correct, heal, cure, meliorate, salvage, recondition, retouch, reassemble, refit, overhaul, rehabilitate, mend, revamp." Id.
"Replace," on the other hand is defined as "to provide a substitute or equivalent. Change, switch, exchange, give satisfaction, restore, refund, cover, swap, supplant, displace, alter, retrieve, supersede, succeed, represent, subrogate, alternate, relieve." Id.
Random House Compact Unabridged Dictionary (2d Ed. 1996) defines "keep" as "to maintain in condition or order, as by care and labor." "Repair" is defined as "to restore to a good or sound condition after decay or damage; mend." Id. "Replace" however, is defined as "to provide a substitute or equivalent in the place of." Id.
The word "repair" means ". . . the restoration to a sound or good state after decay, dilapidation or injury . . .[i]t does not mean to make something new but rather to refit or restore an existing thing." Ingalls v. Roger Smith Hotels Corporation, 143 Conn. 1, 7, 118 A.2d 463 (1955).
The court finds that the language of Section 13(a) is unambiguous and although it requires Polo to pay the costs to "replace" the buildings on the Demised Premises, it does not require Polo to pay the costs to "replace" but only the costs to "keep and maintain in good repair and good order and safe condition" the sidewalks, curbs, roadways and parking areas of the Demised Premises.
SECTION 2 OF THE LEASE
Loring further contends that Polo is required to pay for the cost of the Parking Lot Reconstruction under Section 2 of the Lease.
Loring relies on the language in Section 2(a) of the Lease which required the original tenant (Gam-Beck Realty, Inc.) to construct the buildings on the Demised Premises and the language in Section 2(d) which required the original tenant to construct the parking areas on the Demised Premises.
Loring's argument is unconvincing. Section 2(a) of the Lease required the original tenant to "construct" the buildings and parking areas on the Demised Premises within eighteen months from the date of the Lease. Nowhere in Section 2(a) do the words "replace" or "restore" appear. The parties specifically addressed the obligation of the tenant to replace the buildings and parking areas in Section 13 of the Lease and as hereinbefore noted, there is no obligation found in Section 13 for the tenant to "replace" the parking areas. The court finds that the provisions of Section 2(a), do not obligate the tenant to replace the parking areas or create an independent obligation on Polo to do so.
SECTION 3 OF THE LEASE
Loring claims that Section 3 evidences that the parties intended the Lease to be a "net" lease. Both Rose and D'Addeo testified as to their qualifications as experienced real estate professionals and their understanding that each commercial lease is unique. The court's review of Section 3 reveals only one reference to the word "net." The only testimony received in connection with this claim was from Rose who based his opinion on his reading of the Lease. In view of the parties having addressed the issue of "replacements" and "maintenance" in Sections 13 and 38, the court finds that there is nothing in the language of Section 3 that supports Loring's claim other than the testimony of an interested party.
THE EFFECT OF THE AMENDMENT
Moreover, Loring's argument that its authority to bill Polo for two-thirds of the Parking Lot Reconstruction costs can be found by establishing that the Lease is to be "net" to Loring or by "tying together" various Sections of the Lease overlooks that the first clause in Section 38 reads "Notwithstanding anything to the contrary contained in this Lease . . ."
The use of "Notwithstanding anything to the contrary contained in this Lease" clearly means that the terms of Section 38 govern the obligations of the parties set forth therein even if other Sections of the Lease are in direct conflict, ambiguous or provide otherwise. "Notwithstanding" has the effect of negating any provision to the contrary.
Even if the sections of the Lease cited by Loring were ambiguous or arguably susceptible of being read to support Loring's claim, "Notwithstanding" means `take[s] precedence over' and thus negates any contrary provision. . . ." In re Gulf Oil/Cities Serv. Tender Offer Litig., 725 F. Supp. 712, 729-730 (S.D.N.Y. 1989).
"A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity . . . Similarly, any ambiguity . . . must emanate from the language used in the contract rather than from one party's subjective perception of the terms . . . Moreover, [t]he mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous . . . If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous . . . By contrast, language is unambiguous when it has a definite and precise meaning . . . concerning which there is no reasonable basis for a difference of opinion." (Citation omitted; internal quotation marks omitted.) Goldberg v. Hartford Fire Ins. Co., 269 Conn. 550, 559, 849 A.2d 368 (2004).
If Loring is to find support for its claim that Polo is obligated to pay two-thirds of the cost of the entire Parking Lot Reconstruction pursuant to Section 38, it must be found in Section 38 and a fair reading of the unambiguous language of Section 38 does not support Loring's claim.
CONCLUSION
The court has read the sections of the Lease and Amendment cited by the parties and endeavored to integrate them into a whole instrument from which a clear and unambiguous intention of the parties can be found concerning the issue in dispute. As required by our law, any such intention found must emanate from the language of the Lease, as amended, rather than from the subjective perceptions of the parties. The task is not made simpler by the fact that the 2002 Amendment executed by Loring and Polo amended a lease executed in 1965 by parties whose interests are twice removed and did not testify.
The court has found that by according the written words in the Lease their common, natural and ordinary meaning, the language of the Lease is unambiguous. Even if the language in dispute were ambiguous, "[A] court may always consider surrounding circumstances, even where the [lease] on its face is free from ambiguity." 5 Friedman on Leases (2008) § 26:4, p. 26-9.
The court is mindful of the rule that language in a contract is interpreted against the party who chose it. "In choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds." Restatement (Second), Contract, Interpretation Against The Draftsman § 206, p. 105 (1979).
As noted, the Amendment was drafted by Loring's attorneys. On direct examination, Rose was asked if he had seen the Amendment before. His reply was "I negotiated it on our behalf." Under the doctrine of "contra proferentem," ambiguities in a contract are construed against the party who drafted it. David M. Somers Associates, P.C. v. Busch, 283 Conn. 396, 405 n. 10, 927 A.2d 832 (2007).
Rose testified that since Bishop's Corner East was Loring's first property acquisition in Connecticut, Loring retained Konover to manage the property for a period of time following the acquisition until Loring got its "feet wet" and became familiar with how the property was being managed.
If Loring's pre-acquisition studies raised concerns that the parking lot was in a state of significant disrepair and needed reconstruction, as Rose testified, there was no greater opportunity than at that time to address in the Amendment, any potential uncertainty concerning the party or parties responsible for the cost of the reconstruction.
The failure of experienced and sophisticated real estate professionals to ensure that their written agreement governing a long term legal relationship clearly "pinned down" their respective obligations to pay for major expenses may have simply been the result of an oversight. However, the failure is even more puzzling considering that the Amendment was partially motivated by the parties' desire to settle a dispute concerning the interpretation of a percentage rent clause in the Lease.
Both parties, in their testimony, offered conflicting opinions of the condition of the parking area lot before the Parking Lot Reconstruction work and devoted considerable argument in their post-trial memoranda to whether minor maintenance or major repairs to the parking area were necessary or unnecessary. Neither party submitted evidence of when the parking lot had been constructed or reconstructed. That issue, however, is not before the court at this time. The parties have submitted their dispute to the court for a determination of whether the language of the Lease unambiguously requires Polo to pay for two-thirds of the cost of the Parking Lot Reconstruction or for the cost of some lesser level of "maintenance" as provided for in the Lease.
Polo should recognize that some portions of the Parking Lot Reconstruction can rightfully be considered maintenance since those improvements provide a benefit to Polo by reducing the need for Polo to annually expend sums for two-thirds of the cost to patch potholes and repave the surface of the parking area.
The test for determining the validity of the Parking Lot Expenses billed to Polo is whether the expenses billed involved something more than "maintenance." Any such determination will necessarily require findings based on evidence and testimony from qualified witnesses other than the parties. That determination will be made at the second stage of the bifurcated trial.
For the foregoing reasons, a declaratory judgment is entered in favor of Polo to the effect that the court has found that Polo is not obligated to reimburse Loring for expenses of the Parking Lot Reconstruction which exceed Polo's obligation to keep the parking area on the Premises in a state of general repair as such expenses are determined by further proceedings.
SO ORDERED.