Hale Farms Condominium Association, Inc. v. BG LLC (2011)

MEMORANDUM OF DECISION

FACTS AND PROCEDURE

The plaintiff (hereinafter also “Hale Farms”) is the condominium association for a large condominium complex located in Glastonbury, Connecticut containing ten buildings and 203 privately owned condominium units with an additional unit being used by the Association.   BG Laundry, LLC, the defendant, (hereinafter also “BG”) is a business organization properly licensed with an office in a unit of the Hale Farms Condominium complex.   The owner of BG is Robert Gambino whose address is in the Hale Farms complex.

On or about October 1, 2001 Hale Farms and BG entered into a written agreement (plaintiff's Exhibit 1) (hereinafter also called the “Agreement”) which in effect was also a lease.   The Agreement provided that BG would install and maintain coin-operated laundry machines within Hale Farms, for which BG was required to pay to Hale Farms monthly rent amounting to 50% of the net revenues from the coin-operated laundry machines.   The lease was for ten years and actually took effect on or about November 22, 2001 which was the date by which the machines had been installed.

The relationship between the parties was essentially good up until January of 2009 at which point Robert Gambino (hereinafter also “Gambino”) who is and was the owner of BG but a resident of the condominium complex, his office being in the same unit, complained that there was noise emanating from a neighbor's unit which was disturbing to him.   He made his complaint to Lon Brotman who was the manager of the complex.   It was then determined that the reason for the noise was the use of a portable washing machine in that neighbor's unit.¹  This noise complaint was brought before the board of directors of the plaintiff, (hereinafter also “Board”), but the noise complaint was not resolved, and the issue turned into the claim by BG acting through Mr. Gambino that the agreement/lease (hereinafter also “Lease”) was violated by Hale Farms by permitting that unit to have a washing machine.   At meetings of the Board, some of the board members indicated to unit owners who attended the board meetings that none of the condo association documents prohibited the use of a washing machine in an individual unit.

Mr. Gambino on behalf of BG invoked paragraph four of the Terms and Conditions of the Lease which states as follows:

(4) “If at any time during the Term, Lessor grants permission to individual units to install laundry equipment or provides laundry hookups required for the installation of laundry equipment, or laundry equipment to the individual units, Lessee shall be entitled to reduce the Rent by a proportionate amount and receive the same proportionate amount of all the initial expenses incurred by it, in excess of the capital cost of the Equipment.   This amount shall be directly related to the percentage of units affected.”

BG, interpreting this paragraph, and based upon the neighbor having a portable washer installed in her unit and the fact that the Board or members thereof stated that installation of laundry units in individual units was not prohibited under the certificates of incorporation, bylaws etc., proceeded to withhold the rent in February of 2009 which included a proportionate share of the rent for January 27, 2009 through January 31, 2009 because of what was said at the January 27, 2009 Board of Directors meeting.   BG continued to withhold the rent for every month thereafter which share of the rent to the plaintiff was approximately $2,000 per month.   The defendant, BG, however, did pay what it called rent the cost of utilities and other expenses which each month amounted to $750.

After much back and forth between the parties including written communications as well as verbal communications primarily during Board of Directors meetings, the plaintiff initiated suit against BG in April 2010.   The first count was for breach of contract seeking the return of the rent money that had been withheld, and Count Two was for violation of the Connecticut Unfair Trade Practices Act (“CUTPA”).   This produced a counterclaim by BG alleging breach of contract in the first count based upon its interpretation of the aforementioned paragraph four and in the second count filing a claim for violation of CUTPA.

Trial was heard by this Court on October 18, 19 and 20, 2011.   Transcripts were ordered and subsequently each party filed its initial brief and then a reply brief.

STANDARD OF REVIEW

“The plaintiff in a civil case (and a defendant in Special Defenses and Counterclaim) sustain their burden of proof as to any essential element in their cause of action if the evidence, considered fairly and impartially, induces in the mind of the trier, a reasonable belief that it is more probable than otherwise that the facts involved in that element are true.”  Busker v. United Illuminating Co., 156 Conn. 456, 458 (1968).   This is also known as proof by a preponderance of the evidence.

In addition, this Court evaluates the credibility of the witnesses upon their appearance and demeanor on the witness stand, the consistency or inconsistency of their testimony, their memory or lack thereof of certain events, whether they were candid and forthright or evasive and incomplete, their manner in responding to questions and their interest or lack of interest in the case as well as the exhibits in the case.

Also, the Court evaluates general credibility on the basis of other testimony in this case as well as documents in evidence as to their consistency or inconsistency with other evidence.

The burden is on the plaintiff to prove his allegations by a preponderance of the evidence.   The burden is on the defendants to prove their Special Defenses and Counterclaim by a preponderance of the evidence.

It is well settled law that the interpretation of a contract is an issue of law to be decided by the Court.

It is also well settled law that when there is ambiguity in the terms of a contract/lease, the ambiguity is to be held against the preparer of the contract/lease which in this case is the defendant BG.

ISSUES AND FINDINGS

1. Credibility

The Court did not find a lack of credibility of any of the witnesses who testified as to their testimony.   Robert Gambino, in particular, was very precise as is typical of professional engineers, which he is, and was very honest as he saw the issues.²  Marilyn Rodriguez was honest and candid as were all of the other witnesses who testified.

2. Does the Aforementioned Paragraph Four of the Terms and Conditions of the Lease Allow the Defendant to Withhold Rent from the Plaintiff?

The short answer is No. It was BG that breached the agreement/lease.

BG's interpretation of said paragraph four, although honestly made by Mr. Gambino, was, nevertheless, wrong.   A condition for withholding the rent was that the lessor “grants permission to individual units to install laundry equipment.”

The Court finds that permission was never given nor was it ever requested.   There is no evidence that the lessor was aware of the installation of a portable laundry machine in the unit that was a neighbor of Mr. Gambino until it was brought to the Board's attention by Mr. Gambino's complaint on the noise issue which was transmitted by Mr. Brotman, the manager of the complex, when he brought that information about the aforementioned portable unit to the Board.   The Board had discussions about that portable laundry unit and the issue of whether or not there was any prohibition regarding said laundry units in individual units.   As to the one unit that had a portable washing machine the Board discussed this at some of its monthly meetings with no resolution until June of 2009 when that particular owner sold her unit and took the portable laundry equipment with her, a period of about six months.   When questioned by unit owners at board meetings including Mr. Gambino being present, the board members (there was no evidence that board members voted on this matter) discussed this issue and answered questions honestly that there was no prohibition on such use in the various condominium documents that were applicable.   Silence over the six months while the Board was trying to decide what to do if anything, can hardly be called permission.

In any event, there is no credible evidence before this Court that any unit other than the one aforementioned with a portable washing machine ever had during the term of the lease laundry equipment installed in any of the condominium units.³

In conclusion, this Court interprets paragraph four and the circumstances and evidence in the trial to conclude that the lessor (plaintiff) never granted permission to install laundry equipment in individual units.   Further, even if the one unit was, arguendo, given permission, this permission did not apply to all other units, and none of the other units installed laundry equipment.   There was no way in that paragraph that the installation in one unit even if permission were granted, could reasonably be interpreted that permission was granted to all other units.   This plus the comments made (which were true) that none of the applicable documents of Hale Farms prohibited such laundry units in individual units does not mean permission was granted.   Accordingly, the Court finds that based upon the totality of the evidence, that the plaintiff did not violate paragraph four of the terms and conditions of the Lease, and, therefore the defendant, BG, had no right to retain the rent that was due to the plaintiff.   In sum this Court finds no breach of the agreement/lease by the plaintiff, but does find a breach of same by BG.

3. Did either Party Violate CUTPA?

The short answer is No.

Without going into detail, it is clear that the standard for someone to be in violation of CUTPA is very hard to achieve.

The Court believes Mr. Gambino when he testified that his various proposals to resolve the dispute between the parties were meant as an agenda for discussion and not as a threat.   Mr. Gambino, as stated above, is very precise and very tenacious and as stated by one witness can be irritating at times.

As for the Board of Directors, it is true that Marilyn Rodriguez as Chairman of the Board may have made some inappropriate remarks concerning Robert Gambino;  but the remarks made were in the heat of the moment and the parties by that time had gotten into an adversarial position to put it mildly and as stated by one witness this is the same type of speech that goes on in town council meetings and other types of boards and commissions.   Moreover, in reference to defendant's Exhibit RRR there is very little if any negativity in the poster that was put up by the Board in regard to Robert Gambino and BG Laundry.   Even though he was not re-elected to the Board he was not voted off the Board and Mr. Gambino denied expressing an interest in being back on the Board.   However, these are small issues (although they may not seem small to the individuals involved) in the overall scope of the controversy between the parties.

This is a relationship that became tense, very adversarial, and statements have been made and letters sent which probably should have been worded differently.   However, despite all of that, it is still a simple breach of contract issue which admittedly degenerated into heated arguments.   However, the evidence is not sufficient to prove a violation of CUTPA by either side.

CONCLUSION

Accordingly, the Court enters judgment for the plaintiff on the complaint as to Count One, breach of contract, and for the defendant on Count Two, violation of CUTPA, and on Count One, finds the judgment to be principal of $45,279.00 as stated by Mr. Luke Lembo plus prejudgment interest under CGS Sec. 37–3a for monies wrongfully withheld of $6,143.89 for a total of $51,422.89 and orders the defendant to forthwith pay the plaintiff that amount plus interest that has accrued from the rent the defendant put in the savings account in escrow.   Judgment is entered for that amount in favor of the plaintiff.

The Court enters judgment for the plaintiff on both counts of the counterclaim, breach of contract and violation of CUTPA.

Rittenband, JTR

The Court would like to thank both counsel for their vigorous representation of their clients.

NOTE:  The Court did listen to the disk of a Board of Education meeting provided by the defendant.   However, it was not of the best quality and listening to it the Court could find nothing critical of Mr. Gambino.

FOOTNOTES

FN1. There is no mention in the lease of portable washing machines, and portable ones are obviously not “installed.”.  FN1. There is no mention in the lease of portable washing machines, and portable ones are obviously not “installed.”

FN2. At times, however, he did seem to twist the facts and admitted that he was wrong. i.e. as to BG's loss of revenue and his attempt to recover for a separate company which had no merit.   His credibility was, therefore, reduced..  FN2. At times, however, he did seem to twist the facts and admitted that he was wrong. i.e. as to BG's loss of revenue and his attempt to recover for a separate company which had no merit.   His credibility was, therefore, reduced.

FN3. A possible exception was unit 204 which is the one owned by the Association and not by individual owners..  FN3. A possible exception was unit 204 which is the one owned by the Association and not by individual owners.

Rittenband, Richard M., J.T.R.