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Boccanfuso v. Daghoghi

Appellate Court of Connecticut

October 1, 2019

Dominick BOCCANFUSO et al.
v.
Nader DAGHOGHI et al.

         Argued February 11, 2019

          Appeal from the Superior Court, Judicial District of Stamford-Norwalk, Housing Session, Rodriguez, J.

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          Eugene E. Cederbaum, with whom was Ryan Driscoll, Milford, for the appellants (defendants).

         Matthew B. Woods, Norwalk, for the appellees (plaintiffs).

         Keller, Prescott and Pellegrino, Js.

          OPINION

         KELLER, J.

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          [193 Conn.App. 140] This summary process action involves a lease of commercial premises located at 936-940 Post Road East in Westport (property). The defendants, Nader Daghoghi (Nader), Sassoon Daghoghi (Sassoon) and 940 Post Road East, LLC, doing business as Savoy Rug Gallery (defendant LLC), appeal from a judgment of possession rendered in favor of the plaintiffs, Dominick Boccanfuso (Dominick), Crescienzo Boccanfuso (Crescienzo), and Boccanfuso Bros., Inc. (plaintiff corporation). The defendants claim that the trial court (1) applied an incorrect legal standard in determining that they failed to prove their special defense of equitable nonforfeiture; (2) erred in finding that the plaintiffs were unaware of environmental contamination at the property until after July 1, 2014; (3) abused its discretion in finding that the defendants had failed to prove their special defenses of unjust enrichment and violation of the implied covenant of good faith and fair dealing; and (4) abused its discretion by not granting the defendants a continuance so that a witness could testify. We affirm the judgment of the trial court.

          The following facts, as stipulated to by the parties or as found by the court in its original decision or subsequent articulations, and procedural history are relevant to this appeal.

          The property was owned by the plaintiff corporation, and, at all times relevant to this litigation, Dominick was a shareholder, director and officer of the plaintiff corporation. Since at least 1970 and through the date of Dominick’s retirement at the end of 2013, the property was used as an automobile repair facility. In or about 1989, the plaintiffs installed a 2000 gallon gasoline underground storage tank under the front parking lot of the property. Sometime thereafter, they also installed a 330 gallon waste oil underground storage tank in the rear of the property. Both underground storage tanks [193 Conn.App. 141] were removed in 2013 for reuse elsewhere, but the plaintiffs failed to follow proper procedures and protocols for the removals.

          Dominick received a letter from Absolute Tank Testing, Inc. (Absolute), dated October 31, 2011, advising him that soil samples taken from the area around the perimeter of the 2000 gallon gasoline underground storage tank contained "detectable concentrations of [Extractable Total Petroleum Hydrocarbons] 540 parts per million," and that Absolute had notified the Department of Energy and Environmental Protection (department). (Internal quotation marks omitted.)

          In March, 2013, Dominick’s nephew, Giuseppe Boccanfuso (Giuseppe), who was not licensed to remove underground storage tanks, removed the 2000 gallon gasoline underground storage tank. In March or April, 2014, Giuseppe removed the 300 gallon waste oil underground storage tank. The department was not notified of the removal of either of the tanks. Additionally, no test of the soil surrounding the waste oil underground storage tank was conducted.

          On November 22, 2013, the parties entered into a lease of the property. The five-year lease, with an option of extending the term for five additional five-year terms, provided that the defendants were to convert the property from an automobile repair facility to spaces in which they would operate their two businesses, the Savoy Rug Gallery and a Subway sandwich shop. The defendants intended to use a portion of the space to sell handmade oriental rugs and the remainder to house their Subway franchise.

         Richard H. Girouard, Sr., was the leasing agent for the property and also the

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property manager for the Boccanfuso family. Girouard negotiated the terms and conditions of the lease and drafted it on behalf of the plaintiffs.[1] The monthly base rent for the property was $16,338.

         [193 Conn.App. 142] Prior to the signing of the lease, on October 29, 2013, Girouard, on behalf of Klein New England,[2] sent a letter to the defendants regarding the renovation of the retail space. In this letter, Girouard offered to provide the defendants consulting and design services for the demolition and renovation of the property. Two of Klein New England’s undertakings were to obtain the building permits and certificates of occupancy for the retail space. The defendants paid Klein New England the $22,500 fee set forth in Girouard’s letter.

          On July 1, 2014, over seven months after the lease was signed, the department, after finding evidence of environmental contamination, issued an enforcement order directed to the plaintiff corporation. The department later commenced a civil action against the plaintiff corporation in the Superior Court for the Judicial District of Hartford at Hartford, alleging a violation of the enforcement order. On August 15, 2016, the court, Hon. Susan A. Peck, judge trial referee, rendered a judgment upon the stipulation of the parties to that action.

          Paragraph 33 of the lease provides in pertinent part: "Lessor will be responsible for any environmental issues which may arise with the [d]emised [p]remises." The plaintiffs addressed the contamination issues at their expense, and the property has been remediated in accordance with the stipulation between the plaintiffs and department.

          On June 11, 2014, the defendants obtained a building permit to renovate a portion of the property into the retail rug gallery, and a certificate of occupancy for that renovated space was issued on February 26, 2015.

         [193 Conn.App. 143] At the direction of the plaintiffs, on June 27, 2014, Girouard informed the defendants by letter that the rent commencement date pursuant to paragraph 10 of the lease would be July 1, 2014, and to commence payment of all water and electric charges.[3] In the letter, Girouard also informed the defendants that the plaintiffs had instructed him to handle all lease and building matters exclusively and that the plaintiffs did not want to be called or visited by the defendants about lease or building matters.

          On August 1, 2014, Girouard, on behalf of Klein New England, sent a letter to the defendants regarding the renovation of the Subway space. The defendants paid Klein New England a $9000 consultation fee regarding the renovation of this space.

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          On September 15, 2014, the defendants obtained a building permit for the renovation of the Subway space and a certificate of occupancy was issued for that renovated space on June 5, 2015.

         The defendants did not pay rent for the month of December, 2014, or make any other rent payments thereafter.[4] On January 7, 2015, the plaintiffs served the defendants with a notice to quit for nonpayment of rent when due for commercial property, thereby terminating [193 Conn.App. 144] the lease. The defendants remained in possession of the property beyond the date specified in the notice to quit. On January 17, 2015, the plaintiffs commenced this summary process action.

          In their answer to the complaint, the defendants raised six special defenses. All but the first special defense, which alleged a lack of standing on the part of the plaintiff corporation, are the subjects of this appeal.

         In their second special defense, the defendants alleged that the plaintiffs had violated paragraphs 14 and 33 of the lease by failing to remediate environmental contamination they caused and were aware of prior to the execution of the lease.[5] In their third special defense, the defendants alleged that the plaintiffs, by failing to remediate the environmental contamination, had violated the implied covenant of good faith and fair dealing.

         The defendants’ fourth special defense alleged unjust enrichment as a result of the failure of the plaintiff’s property manager, Girouard, to properly oversee the extensive renovations to the property pursuant to "an agreement" he had with the defendants.[6] The defendants asserted that Girouard failed to obtain a certificate of occupancy until fourteen months after the lease was signed, which caused the defendants to pay basic [193 Conn.App. 145] and additional rent to the plaintiffs, unjustly enriching them, for a period when the defendants were unable to physically occupy any portion of the leased premises.

          In their fifth special defense, the defendants alleged that, despite the failure of the plaintiffs’ property manager and agent, Girouard, to properly oversee the progress of their renovations, the plaintiffs required them to pay basic and additional rent. The plaintiffs’ demand of these payments prior to the defendants’ ability to physically occupy any portion of the property, they allege, was a violation of the implied covenant of good faith and fair dealing owed to them by the plaintiffs.

          The sixth special defense alleged that the plaintiffs’ claim for possession of the leased premises was barred by the equitable

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doctrine against forfeitures. This special defense, however, failed to allege or incorporate any facts. In the defendants’ posttrial brief, the defendants argued to the court that their justifiable reasons for withholding of rent were due to (1) being unaware of long existent on-site contamination of the property until the fall of 2014, nine months after the lease was signed, and their concern that the Subway would not be permitted to open due to the contamination, which had not yet been remediated in breach of the plaintiffs’ obligations under paragraph 33 of the lease; (2) the plaintiffs’ failure to extend the rent abatement period despite Girouard’s failure to obtain expediently certificates of occupancy for either the retail or food service uses; and (3) counsel’s advice to hold the rent in escrow.

          In their reply, the plaintiffs essentially denied the allegations contained in the defendants’ special defenses.

          A trial was held before the court over three days: February 2, 2016, May 19, 2016, and April 4, 2017. At the court’s request, during trial on February 2, 2016, counsel for the parties acknowledged that the court, in deciding the issues, could rely on a joint stipulation [193 Conn.App. ...


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