Argued
March 12, 2019
Appeal
from Superior Court, Judicial District of Fairfield,
Krumeich, J.
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James
M. Moriarty, with whom, on the brief, was Aaron A. Romney,
Bridgeport, for the appellant-cross appellee in AC 41398
(defendant in the first case).
Colin
B. Connor, with whom were Joseph DaSilva, Jr., Norwalk and
Robert D. Russo III, Southport, for the appellee-cross
appellant in AC 41398 (plaintiff in the first case).
Joseph
DaSilva, Jr., Norwalk, with whom were Colin B. Connor and, on
the brief, Robert D. Russo III, Southport and Marc J.
Grenier, Norwalk, for the appellants in AC 41543 (defendants
in the second case).
James
M. Moriarty, with whom, on the brief, was Aaron A. Romney,
Bridgeport, for the appellee in AC 41543 (plaintiff in the
second case).
Lavine,
Prescott and Eveleigh, Js.
OPINION
PRESCOTT,
J.
Page 91
[193
Conn.App. 702] The present appeals and cross appeal arise
from two actions involving a commercial lease that share a
nucleus of operative facts and were consolidated for trial.
They raise, among other issues, whether the landlords
failure to take actions to remedy recurrent sewage backups
into the leased premises occupied by an eye surgery center
resulted in a constructive eviction that excused the tenant
from the obligation to pay rent in accordance with the terms
of the lease, and whether, as a result of the alleged
inaction of the landlord and its property management company,
the eye surgery center was entitled to recover compensatory
damages for the loss of its use of improvements it previously
had made to the premises.
In the
action underlying AC 41398 (rent action), Commerce Park
Associates, LLC (Commerce Park),[1] sought to recover rent it
alleges it was owed by a former tenant, Kim Robbins— an
ophthalmologist and the owner of Robbins Eye Center, P.C.
(REC). REC had occupied the lower level of a commercial
property owned by Commerce Park in Bridgeport pursuant to a
commercial [193 Conn.App. 703] lease but vacated the premises
prior to the leases expiration following a series of sewage
backups that flooded the premises. Robbins now appeals, and
Commerce Park cross appeals, from the judgment of the trial
court rendered in part in favor of Commerce Park. Robbins
claims that the court improperly (1) awarded Commerce Park
rent for a period of time from November, 2014, through the
third full week of April, 2015, and (2) miscalculated the
amount of the rent that she owed for that period. Commerce
Park claims by way of cross appeal that the court improperly
determined that Robbins was constructively evicted from the
premises after the third full week of April, 2015, by the
sewage backups, and, consequently, Commerce Park was not
entitled to recover any rent from Robbins after that date. We
affirm the judgment of the court with the exception of its
calculation of the amount of the rent awarded to Commerce
Park and, accordingly, remand for a new hearing in damages in
the rent action.
In the
action underlying AC 41543 (tort action), REC sued Commerce
Park and its property manager, RDR Management, LLC (RDR),
seeking monetary damages for economic injuries that REC
suffered as a result of their failure to make necessary
repairs to the premises. Commerce Park now
appeals[2] from the judgment of the
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trial court rendered in part in favor of REC and awarding REC
damages of $958,041.92 against Commerce Park.[3] Commerce Park
claims that the trial court improperly (1) awarded damages on
the basis of gross negligence because (a) Connecticut common
law does not recognize distinctions or degrees of negligence
and (b) REC never pleaded or otherwise asserted allegations
of gross negligence prior to trial; and (2) miscalculated the
amount of damages awarded because the court [193 Conn.App.
704] (a) utilized an incorrect measure of damages in
determining RECs losses and (b) misconstrued the length of
Robbins expected tenancy under the lease, which was an
integral component of the courts calculation of damages. We
agree that the court improperly included two unexercised
lease extension options in determining the length of Robbins
tenancy and, accordingly, reverse the amount of damages
awarded; we otherwise affirm the judgment of the court in the
tort action.
The
following facts, which either were stipulated by the
parties[4] or found by the trial court, and
procedural history are relevant to our discussion of the
parties claims. Beginning in 1995, Robbins leased from
Commerce Park increasing amounts of space in the lower level
of a commercial building it owned at 4695 Main Street in
Bridgeport (building). The building, which was constructed in
1964, primarily houses medical offices and is part of a
complex of office buildings owned by Commerce Park. By 2014,
the buildings roof, foundation, and sanitary sewer system
were in poor condition and in need of repair.
Although Robbins executed the original and all subsequent
leases, the leased space was occupied by REC, Robbins
ophthalmological and surgical practice. REC is a domestic
professional corporation with Robbins as its sole
shareholder. REC paid all rents and other charges due under
the operative lease and carried all required insurance
policies, which, as described by the court, made REC
"the de facto tenant of the leased space with whom the
landlord dealt."
On
August 1, 2007, Robbins executed the lease at issue in the
present appeals and cross appeal. Pursuant to the lease,
Robbins agreed to rent the entire lower [193 Conn.App. 705]
level of the building (premises), which consisted of 20,750
square feet of space. The lease was for a fifteen year term,
with the tenant, Robbins, having the option of extending the
lease for two additional five year terms. The lease required
Robbins to pay rent at an adjustable rate, starting at
$186,750 per year and payable in monthly installments of
$15,562.50.[5] Robbins also was responsible for
paying a pro rata share of the buildings property taxes as
additional rent.
Paragraph 23 (c) of the lease provided in relevant part:
"In the event the Demised Premises shall be damaged by
fire or other casualty and shall be rendered wholly or
partially untenantable, then ... Landlord shall, at
Landlords own cost and expense, proceed with all reasonable
dispatch
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to cause the damage to be repaired and in the case of partial
damage, the monthly rental for any period of such repair
which is not otherwise covered by Tenants business
interruption insurance shall be abated in proportion to the
portion of the Demised Premises rendered untenantable
...."
Paragraph 16 (b) of the lease provided in relevant part:
"[U]nless caused by the gross negligence or
willfulness of Landlord, or of Landlords agents,
Landlord shall not be responsible or liable to Tenant, or any
person, firm or corporation claiming by, through, or under
Tenant for, or by reason of, any defect in the Demised
Premises ... or from any injury or loss or damage to person
or property of Tenant, for loss of or damage to property
contained in or upon the Demised Premises ... caused by or
arising or resulting from pipes ... or by or from any defect
in or leakage, running or overflow of water or sewerage in
any part of the Demised Premises ...." (Emphasis added.)
[193
Conn.App. 706] After signing the new lease, Robbins hired a
contractor to transform the premises into what the trial
court found was a "state-of-the-art eye care center,
complete with a surgical center with two operating rooms
certified by the state for optical surgery ... a LASIK
facility, and an optical shop." The remodeling was
completed in December, 2009, at a cost of
$1,186,267.[6]
In
September, 2013, during a period of heavy rain, a downspout
detached from a roof drain, which allowed water to flood into
the building and inundate parts of the lower
level.[7] The flooding from above was
exacerbated by groundwater that seeped in through the
buildings porous foundation. The water caused substantial
damage to RECs equipment, materials, and work spaces. As a
result of the flooding, REC was forced to suspend business
completely for six weeks. Afterward, by relocating its
examination rooms and a downsized version of its optical shop
into portions of the premises designated for administrative
offices, REC was able partially to resume operations, albeit
utilizing only approximately one half of the leased premises.
For
months, mold would appear at various times and locations
within the premises. By the end of October, 2014, however,
REC had repaired the flood damage, remediated the mold
infestations, and reoccupied the [193 Conn.App. 707]
remainder of the premises, including the surgical
center.[8]
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At
other times, both before and after the major flooding
incident in 2013, RECs normal operations were interrupted
due to contaminated water that leaked into the premises from
blocked toilets in the offices or common areas of the upper
floors of the building. Patients and staff often smelled
urine or other foul odors at various locations throughout the
lower floor. The court found that these various smaller
leaks, although certainly disruptive, never rendered the
premises untenantable. Nevertheless, as the court noted,
"Robbins and REC became disenchanted with RDRs and
[Commerce Parks] attitude and efforts to maintain and repair
the building. The periodic plumbing problems, unpleasant
odors and mold blooms proved to be quite disruptive [to] the
practice and eroded any goodwill remaining between Robbins
and REC, on one side, and RDR and [Commerce Park], on the
other." On the basis of the various problems with the
premises, beginning in September, 2013, and continuing until
the time REC vacated the premises on June 30, 2015, Robbins,
through REC, paid only approximately one half of her monthly
rental obligation under the lease.
Beginning in April, 2015, and continuing into May and June,
2015, the buildings sewage system backed up, [193 Conn.App.
708] causing sewer water and waste to flood the premises.
Specifically, sewage flooded the premises on April 23, 27,
and 28, 2015. In addition, on April 29, 2015, a plumber hired
by RDR accidently cut a waste pipe, causing additional sewer
water and fecal matter to contaminate RECs offices.
Continued incidents of sewage backups in the following months
culminated in a major event on June 29, 2015. At that time,
REC complained to municipal authorities, including Lawrence
Palaia, the sanitarian of the city of Bridgeport. Palaia, who
described the premises as having "sewer water all over
the place," issued a notice of violation to Commerce
Park and RDR, and ordered REC to close operations until the
problem was remedied. As set forth in the courts memorandum
of decision, "[t]he notice demanded that [Commerce Park]
engage a contractor acceptable to the city [of Bridgeport],
take out any necessary permits, and commence repairs within
three business days. The [premises were] supposed to be
vacant until the city signed off on [their] condition after
repairs and cleanup." REC and Robbins vacated the
premises on June 30, 2015.
The
serious and persistent problems with the buildings sanitary
sewer system were known by Commerce Park and RDR and were
well-documented. The court made the following findings
regarding the problems that existed and the response by
Commerce Park and RDR: "[T]here were several serious
backups of the sewer system ... into the [premises] as a
result of known defects in the sewer system that RDR and
[Commerce Park] failed to address effectively. No one has a
map of the sewer system, which has a main sewer line under
the slab and branch lines connected to an uncounted number of
plumbing fixtures throughout the [b]uilding. The main sewer
line is a gravity fed system that uses four inch cast-iron
pipes to pass sewer water, paper and effluent into a cistern,
where it is collected [193 Conn.App. 709] and, when it
reaches a certain level, is ejected out of the [b]uilding by
two ejector pumps. One problem with the system is that there
is insufficient pitch in the main line to efficiently pass
water and material to the cistern.... [T]here was
insufficient space for the existing main line to be building
code compliant in pitch of the pipes into the cistern. The
other related problem is that the system
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lacked uniformity of pitch. The cast-iron pipe used in the
system has multiple sags, some of which were major and acted
as pockets that trapped water and material flushed down the
toilets that, together with insufficient pitch, ultimately
led to clogs, which backed up the system and sent sewer
water, effluent and raw sewage into the lower level occupied
by REC on a number of occasions." (Internal quotation
marks omitted.)
As
further explained by the court, on at least five occasions
between 1997 and 2015, sewer contractors hired by RDR made
videotapes of the sewer system in conjunction with clearing
out blockages in the system. "These videos demonstrated
a deteriorating sewer piping system as penetration of the
pipe and sags worsened over time. The first video in 1997
showed a penetration of a rock into the main line, and
subsequent videos in 2014 and 2015 showed multiple sags
worsening over time.... [T]here were sags throughout the main
line and laterals, some of which were major and severe enough
to cause backups.... [T]here were clogs all over the system,
not just in one place .... [F]loods to the lower floor would
be caused by a clog in the main line, not the laterals....
[T]he recurrence of problems more frequently indicated [that]
there was a problem with the performance of the system, and
[RDRs sewer contractor] had discussed the defects and
possible remedies with RDR, such as cutting up the floor to
replace the pipes, as well as controlling what went into the
system. A former employee of RDR ... [193 Conn.App. 710] was
present when a video was taken on June 12, 2014, and informed
RDR of the sewer contractors concern about sags that needed
to be fixed, and also about the need to rip up the floors to
make repairs to the pipes. He was also present when the video
was taken on June 28, 2015, when multiple sags were seen, and
he told RDR ... that the sewer contractor expressed concern
about sags, in particular, a major sag in the main line,
approximately twenty feet from the ejector pit, that needed
to be dug up and fixed.... [T]he major sags, along with lack
of pitch, had become worse over time and interfered with the
performance of the system and caused the sewage backups into
the [premises]." (Footnotes omitted; internal quotation
marks omitted.)
Moreover,
as expressly found by the court, both RDRs sewer contractor
and RDRs own personnel had advised RDR about the presence of
the sags in the system, that those sags were the cause of the
many sewer backups in the building, and that the sags could
be remedied properly only by tearing up the floor and
replacing the affected sections of the pipe. RDR also was
informed by its contractor that, if it chose not to repair
the sags, "it would be necessary to carry on a
preventative maintenance program to periodically snake the
sewer system to break up potential clogs before they were
formed. RDR and [Commerce Park] pursued neither course but
merely decided to address system backups as they
occurred."[9]
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[193
Conn.App. 711] Commerce Park commenced the action against
Robbins for back rent on June 24, 2014, which was after the
flooding event of September, 2013, but prior to the major
sewage backups in 2015. The one count complaint alleged that
Robbins had breached her obligations under the lease because,
after August, 2013, she had failed to make the full required
monthly rental payments.
Robbins
filed an answer, special defenses, and counterclaims on
August 14, 2014. By way of special defense, Robbins asserted
that Commerce Park breached the lease by failing to maintain
the premises in a tenantable condition, thus excusing her own
nonperformance. Robbins further claimed that she was entitled
to a setoff from any rent owed for the damages she sustained
as a consequence of Commerce Parks "gross negligence
and wilfulness in maintaining the leased premises," and
that she was entitled to an abatement of the rent under the
provisions of the lease due to damage from the water and
sewer infiltrations that rendered the premises untenantable.
Robbins also alleged counterclaims sounding in breach of
contract, tort, constructive eviction, and a violation of the
Connecticut Unfair Trade Practices Act (CUTPA), General
Statutes § 42-110a et seq.
Robbins later determined that the damages she sought by way
of relief in her counterclaims in the rent action actually
were incurred by REC. Consequently, on September 9, 2016, REC
commenced the underlying tort action against Commerce Park
and RDR. Count one of the operative complaint in the tort
action alleged negligence against Commerce Park for breach of
its duty to properly maintain the premises. Count two alleged
negligence against RDR for breaching its property management
responsibilities by utilizing unlicensed [193 Conn.App. 712]
plumbers to conduct repairs, knowing that failure to repair
and replace the sewage line properly could cause substantial
damage to REC. Count three alleged common-law recklessness by
Commerce Park. Counts four and five alleged violations of
CUTPA against Commerce Park and RDR, respectively.
On
October 7, 2016, Robbins filed a motion seeking to
consolidate the two matters, which the court granted. Robbins
thereafter withdrew her counterclaims in the rent action. The
matters were consolidated and tried to the court,
Krumeich, J., over seven days in July,
2017. The parties each submitted multiple posttrial briefs.
The
court issued a memorandum of decision resolving the two
actions on February 6, 2018. The court first addressed
Commerce Parks allegations in the rent action that Robbins
had breached the lease and that it was owed additional rent
for the period of time that REC occupied the premises but had
failed to pay its full monthly rental obligations, as well as
for the time period after REC vacated the premises through
the termination date of the lease. The court agreed with
Robbins that REC had been constructively evicted from the
premises as a result of the numerous sewer backups beginning
in the last week of April, 2015, and continuing until REC
vacated the premises at the end of June, 2015. Accordingly,
the court determined that Commerce Park was not owed any rent
under the lease from April 23, 2015, through the end of the
lease period.[10]
Page 97
The
court determined, however, that Commerce Park was owed
additional rent for a portion of the period beginning in
September, 2013, and continuing through the first three weeks
of April, 2015, during which time [193 Conn.App. 713] REC had
paid only one half of the total rent due under the lease.
According to the court, "[w]ith respect to the period
[of] September, 2013, to October, 2014, there should be a
partial rent abatement that, based roughly on the area
affected, justifies the reduced rent paid by REC. There were
five and three-quarter months, however, [between November,
2014, and April 22, 2015], when there [were] no grounds to
abate the rent. Failure to pay the full rental for those
months was a breach of the lease, and [Commerce Park] was
damaged to the extent ...