Opinion
No. WASP-042478
May 5, 2010
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT
I) Facts
This commercial eviction, the third in a series, features an extraordinarily unique and complicated history:
August 30, 2007: The parties enter into a written lease regarding a portion of the premises located at 150 Mattatuck Heights Road in Waterbury, Connecticut.
January 19, 2008: Plaintiff landlords serve defendant tenant with a Notice to Quit based on its alleged failure to pay CAM charges as required by the lease.
January 24, 2008: Plaintiffs serve defendant with a summary process complaint ("first summary process action").
February 15, 2008: Plaintiffs withdraw the first summary process action in the face of defendant's Motion to Dismiss alleging problems with service of process.
February 16, 2008: Plaintiffs file a second summary process action ("the second summary process action") relying on the Notice to Quit served as a predicate to the first summary process action.
March 11, 2008: Defendant files a Motion to Dismiss, alleging lack of subject matter jurisdiction based on plaintiffs' failure to file a second Notice to Quit as a predicate to the second summary process action.
May 14, 2008: Judge Crawford grants defendant's Motion to Dismiss.
May 16, 2008: Plaintiffs appeal Judge Crawford's decision to the Appellate Court.
July 28, 2008: Plaintiffs move to transfer their appeal to the Connecticut Supreme Court.
September 4, 2008: The Connecticut Supreme Court grants plaintiffs' Motion to Transfer.
September 10, 2008: Plaintiffs file a Motion for Use and Occupancy Payments
October 24, 2008: The court (Levin, J.) orders defendant to pay use and occupancy payments into court.
February 10, 2009: The parties present oral argument before the Connecticut Supreme Court.
May 13, 2009: The parties settle their dispute through mediation and execute a Settlement Agreement that contains the following language: "Plaintiffs shall withdraw the pending appeal and summary process action and shall not institute any new summary process action or other claim based on the events alleged herein. The Lease shall be deemed in full force and effect as of January 18, 2008."
May 14, 2009: Plaintiffs file a withdrawal of the second summary process action, but apparently neglect to withdraw the pending appeal.
May 29, 2009: Plaintiffs file a Motion to Release Use and Occupancy Payments, which is granted by the court (Abrams, J.) absent defendant's objection.
July 7, 2009: Plaintiffs send defendant a Notice of Default by certified mail based on defendant's alleged failure to pay June and July 2008 CAM charges as required by the lease.
July 14, 2009: The Connecticut Supreme Court, to the apparent surprise of the parties to this action, issues a decision affirming Judge Crawford's ruling that plaintiffs' failure to file a separate Notice to Quit as a predicate to the second summary process action robbed the court of subject matter jurisdiction, effectively reinstating the original lease. Waterbury Twin, LLC v Renal Treatment Centers-Northeast, Inc., 292 Conn. 459 (2009).
August 3, 2009: Plaintiffs send defendant a certified letter demanding that defendant pay the August 2008 CAM charges.
August 4, 2009: Plaintiffs serve defendant with a Notice to Quit.
August 12, 2009: Plaintiffs file this summary process action ("the third summary process action").
January 13, 2010: Defendant files this Motion for Summary Judgment.
February 5, 2010: Plaintiffs file an Objection.
February 24, 2010: The parties present oral argument before the court.
II) Discussion of Law
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." Connecticut Medical Insurance Co. v. Kulikowski, 286 Conn. 1, 4-5 (2008)
Defendant seeks judgment as a matter of law based on the argument that, because the second summary process action was not disposed of until the July 14, 2009 Supreme Court decision, the alleged defaults plaintiff relies upon in this action occurred during the pendency of the second summary process action and prior to the reinstatement of the lease. As a result, defendant maintains that the alleged non payments were of use and occupancy payments rather than obligations under the lease and cannot serve as a basis for a summary process action. City of Bridgeport v Barbour-Daniel Electronics, 16 Conn.App. 574, 581 n. 7 (1988). Defendant counters that when the parties executed their May 13, 2009 Settlement Agreement, the second summary process action was disposed of and the lease reinstated and, as a result, the non payments it complains of are, indeed, breaches of the lease.
These allegations are contained in defendant's Second Special Defense. Defendant's Third Special Defense, which also relies on the argument that plaintiff's second summary process action was not disposed of until the Supreme Court decision, contains allegations that plaintiff failed to comply with the notice provisions of the lease.
The disposition of this Motion rises or falls on the court's determination of the effective date of the lease reinstatement: 1) Is it May 13, 2009, the date the parties entered into a Settlement Agreement expressly reinstating the lease; or 2) Is it July 14, 2009, the date the Connecticut Supreme Court issued its decision upholding Judge Crawford's ruling that plaintiff had never properly terminated the lease? Set in its starkest terms, the issue before the court is whether the Settlement Agreement or the subsequent Supreme Court decision governs the relationship between the parties. When parties to a dispute reach a settlement, does subsequent court action serve to alter the parties' agreement? This issue appears to be one of first impression in Connecticut. Unfortunately, neither party cites any extra-jurisdictional authority that addresses this issue and the court was able to locate only two cases involving this issue. In State Farm Mutual Auto Insurance v. Wilkinson, 548 NE.2d 835 (Ind.App. 1990), the court found that court action subsequent to an unreported settlement agreement was moot because "[b]y entering into a settlement agreement the parties effectively withdrew their dispute from further resolution by the trial court." Id., 837 To the contrary, in Wright v. Lake County Sheriff's Department, United States District Court, Docket No. 2:04 CV 524 (N.D.Ind. 2006), the court refused to vacate a dispositive court order that issued after the parties had allegedly reached a settlement agreement, finding that the existence of the settlement agreement bore no relationship to the court's disposition of the case on the merits. While this court finds the latter argument more persuasive, such a finding is ultimately not dispositive in this case.
The Wright opinion indicates that few courts have considered this question. It is this court's presumption that while this factual scenario probably occurs more frequently than the paucity of reported case law would indicate, under most circumstances, the question is purely academic and does not give rise to further litigation.
Rather, the resolution of this issue lies in the court's exercise of its equitable powers. Although the Supreme Court decision in this matter may be of full legal force and effect, defendant waived its ability to assert any rights that might come its way through subsequent court action when it entered into the Settlement Agreement. In other words, defendant's May 13, 2009 agreement reinstating the lease estops it from now claiming that the lease was actually reinstated by the Supreme Court's July 14, 2009 decision, regardless of the possible legal validity of that assertion. "Waiver is the intentional relinquishment or abandonment of a known right or privilege . . . As a general rule, both statutory and constitutional rights and privileges may be waived . . . Waiver is based upon a species of the principle of estoppel and where applicable it will be enforced as the estoppel would be enforced . . .Estoppel has its roots in equity and stems from the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed . . . Waiver does not have to be express, but may consist of acts or conduct from which waiver may be implied . . . In other words, waiver may be inferred from the circumstances if it is reasonable to do so." (Citations omitted; internal quotation marks omitted.) Rosado v. Bridgeport Roman Catholic Diocesan Corp., 292 Conn. 1, 57, 970 A.2d 656, cert. denied sub nom. Bridgeport Roman Catholic Diocesan Corp. v. New York Times Co. U.S., 130 S.Ct. 500, 175 L.Ed.2d 348 (2009)." Wiele v. Board of Assessment, 119 Conn.App. 544, 549-50 (2010). At least one other Connecticut court has employed the doctrine of estoppel to enforce the terms of a settlement agreement. Zauner v. Brewer, Docket No. 049135, Judicial District of Litchfield (August 11, 1992, Gill, J.) [ 7 Conn. L. Rptr. 251].
While plaintiffs argue that defendant comes to the court with unclean hands because it failed to respond to plaintiffs' lease default notices, the court is unwilling to find that ignoring a few pieces of certified mail leaves one with unclean hands.
While plaintiffs' equitable position would be considerably stronger if it was defendant, rather than plaintiffs, which had assumed responsibility for withdrawing the pending appeal, the court finds that plaintiffs' failure in this regard is not fatal to its cause.
This result also finds support in the public policy favoring settlement of disputes: "[T]he law favors settlements, which conserve scare judicial resources and minimize the parties' transaction costs . . ." Blake v. Levy, 191 Conn. 257, 264 (1983). "It is well recognized that an agreement to settle a lawsuit, voluntarily entered into, is binding upon the parties. Pugh v. Super Fresh Foodmarkets, Inc., 640 F.Sup. 1306, 1307 (E.D.Pa. 1986); Main Line Theaters, Inc. v. Paramount Film Distribution Corp, 208 F.2d 990 (3d Cir. 1967). Once reached, the agreement cannot be repudiated by either party. Rather, such an agreement will be summarily enforced by the court. See, e.g., Terwilliger v. Terwilliger, 29 Conn.Sup. 465, 471, 293 A.2d 12 (1972). A settlement agreement is a legally enforceable contract to settle, with consideration predicated upon mutuality of agreement. Id., 470. Indeed, such agreements are favored by the law. Id." Zauner, supra.
III) Conclusion
The court finds that defendant is estopped from asserting that the lease was reinstated upon the issuance of the July 14, 2009 Supreme Court decision rather than the execution of the parties' May 13, 2009 Settlement Agreement. As a result, defendant's claims fail as a matter of law and a genuine issue of material fact exists regarding whether defendant is in breach of the lease. Defendant's Motion for Summary Judgment is hereby denied.