1075 LLC v. Ryder Truck Rental, Inc. (2012)

MEMORANDUM OF DECISION

The plaintiff, 1075 Honeyspot Road, LLC (Honeyspot), commenced this action by summons and complaint dated May 12, 2009, against the defendant, Ryder Truck Rental, Inc. (Ryder).  The operative complaint, Honeyspot's fourth amended complaint dated February 3, 2010, sounds in a single count of breach of contract.   Ryder has filed answers and special defenses, including:  constructive eviction, breach of the covenant of good faith and fair dealing and equitable estoppel.   Ryder has also filed a demand for setoff and counterclaims seeking recovery of rent paid and funds allegedly due under the terms of a loan between the parties.

Honeyspot, in turn, has responded to the counterclaims with its own special defenses, including equitable estoppel and waiver.   This matter went to trial on December 14, 2011, and on various dates through January 25, 2012.

FACTS

The court makes the following findings of fact.   Honeyspot is the owner of commercial property located at 1075 Honeyspot Road, Stratford.   The property consists of land, some of which is paved and fenced, together with a building.   In February 2008, Honeyspot, as lessor, and Ryder, as lessee, negotiated a lease of a portion of 1075 Honeyspot Road consisting of 62,127.6 square feet of land and 680 square feet of space in the building (premises).¹  Ryder prepared a written lease that, after an amendment, provided for a five-year term commencing on April 1, 2008.²  Rent for the first year was $12,200 per month and Ryder agreed to prepay $25,000 as rent in advance upon taking possession of the premises.   The sum of $1,000 per month was to be offset against rent payments due for the second through twenty-sixth months of the lease term to recover the rent advance.   Ryder also agreed to pay 50 percent of the maintenance costs for a common access drive and to reimburse Honeyspot for real estate taxes attributable to the premises.   Rent was to increase to $12,700 per month for the second year of the lease and to $13,200 per month for years three through five.   In exchange, Honeyspot agreed to all necessary site improvements in accordance with an exhibit appended to the lease.   Among other requirements, the site improvements included:  completion of the asphalt paving of a lot, installation of three additional light poles to total seven poles and completion of the landscaping.

Ryder took possession of the premises and by midsummer was in full operation.   Nevertheless, Honeyspot had installed only five light poles instead of the required seven,³ and had still not completed the final paving and landscaping.   Jay Stavola, the property manager for Honeyspot, had obtained estimates for the work and had lined up financing through a private investor, Carmine Massimino, who already held a first mortgage on Honeyspot's property.   Massimino wanted, however, to charge a 12 percent interest rate.   Honeyspot and Stavola were working under a deadline.   The parties' lease contained both a general default provision and a specific default provision.   The general default provision provided that in the event Honeyspot did not cure a default within thirty days of notice, Ryder had the option to cure the default and deduct the cost from its rent.   The specific default provision provided that if paving was not completed by July 20, 2008, Ryder could withhold rent until the paving was completed, and upon completion pay the prorated portion of the remainder of the month.   Stavola, who had already successfully negotiated the $25,000 rent advance in the lease, thought he could then negotiate a modification to the lease to obtain an additional $100,000 rent advance to cover the cost of paving and the remaining improvements.   Stavola also sought the help of Fred Frasinelli, Honeyspot's real estate broker, who contacted Ed Gallant, Ryder's director of rentals for New England.   Gallant did not have the authority to assent to the lease modification, but on August 1, 2008, he sent an email to Mark Cicchini, Ryder's vice president of rentals, outlining Frasinelli's proposal.

Throughout this time Stavola was in contact with Brian DaCosta, an employee of Johnson Controls, Inc., which was Ryder's construction project manager for Ryder's facility operating out of the premises.⁴  DaCosta also delivered Stavola's proposal to Gallant.   By mid- to late-August there was discussion within Ryder of how to complete the paving and other improvements.   By August 21, 2008, in an email to Gallant and Ryder's counsel, Leslie Pena, Ryder's senior manager, Maureen Donnelly, recommended that Ryder provide the funds to Honeyspot for the completion of the work.   Subsequently, DaCosta had a conversation with Gallant and Cicchini at which time they requested that DaCoasta get together with Dan Clark, Ryder's real estate broker, to draft a proposal letter to Honeyspot and Stavola.   This proposal letter would include a new spreadsheet of future lease payment terms for an amendment to the lease incorporating the $100,000 advance rental payment and terms for its repayment by credits against future rental payments remaining on the lease term.   On September 11, 2008, DaCosta followed up with an email to Clark advising him of the conversation with Gallant and Cicchini, the terms of the proposed lease modification and the need for Clark to have the proposal letter ready for a meeting with Stavola on the following Monday.   Cicchini wanted Stavola's acknowledgment of agreement to the modification terms at that time.

At the time of trial, DaCosta professed ignorance or lapse of memory as to whether that proposal letter was ever prepared or presented to Stavola at the meeting on Monday, September 15, 2008.   DaCosta did recall being at the meeting when Stavola provided several paving proposals.   During that meeting, Stavola and DaCosta engaged in a conversation with a Ryder representative via speaker phone in Ryder's rental office on the premises.   There was no testimony as to the identity of the representative.   Stavola gave his assent to Ryder's proposal and the unnamed representative acknowledged their agreement.   Both DaCosta and Stavola left the meeting believing that Ryder and Stavola, on behalf of Honeyspot, had reached an agreement on the $100,000 rental advance and future rent credit terms.⁵  Three days later, on September 18, 2008, Gallant sent an email to Donnelly and Pena acknowledging Stavola's acceptance of the proposal, directing them to prepare the lease amendment and reminding them that this had to be done expeditiously so that the paving could be accomplished before the onset of winter and the closing of the asphalt plants.   The written lease provided that no alterations or modifications were valid unless they were in writing and duly executed by the landlord and the tenant.   Gallant copied the email to Cicchini, DaCosta and Steve O'Connor, Ryder's director of operations.

Throughout the time the parties were negotiating, August and September 2008, Ryder made the rental payments due under the lease without invoking the rent forfeiture clause for Honeyspot's failure to have the paving completed by July 20, 2008.   Going forward after the September 15, 2008 meeting, Ryder continued to make lease payments for the next four months through January 2009, without invoking the forfeiture clause and in compliance with the parties' agreement in principal to modify the lease.   Stavola relied on the assertions of DaCosta and the unnamed Ryder representative on the September 15 phone conference call that there was an agreement on the lease modification and that the written lease amendment would be forthcoming.   He also relied on Ryder's conduct in continuing to pay rent for the next four months, declined to accept the loan from Massimino, did not make arrangements to complete the paving or other improvements and waited patiently for the lease amendment to show up without inquiring further.⁶  During these months Ryder continued to operate its truck rental facility from the premises.

No lease amendment would be forthcoming from Ryder.   By a letter dated January 29, 2009, Ryder's counsel, Pena, notified Honeyspot and Stavola that Ryder was calling Honeyspot in default for its failure to pave the lot by the date set forth in the lease, July 20, 2008, and was invoking the rent forfeiture provisions of the lease until such time as the lot was paved.   At that time it was midwinter;  the asphalt plants had long been closed and would not open until May. Further, the landscaping could not be competed until the paving was completed.   A series of correspondence then ensued between Pena and Daniel Shepro, counsel for Honeyspot, in which both attorneys argued the application of the various default provisions in the lease and discussed a complete separation by way of Ryder “buying out” the balance of the lease term.⁷

In a February 7, 2009 letter addressed to Pena, Shepro threatened to give “formal notice of default for failure to pay rent” if a resolution was not reached within one week.   In addition to a grace period to the tenth day of each month, the lease contained a pretermination notice requirement in the event of a default by the tenant and a ten day period during which the tenant had a right to cure.   Despite Shepro's threat, no pretermination notice was ever given to Ryder triggering the ten day right to cure.   Nonetheless, a March 11, 2009 notice to quit on the basis of nonpayment of rent with a quit date of March 24, 2009, was apparently served on Ryder.⁸

By a March 23, 2009 letter addressed to Shepro, Pena informed Honeyspot that pursuant to the provisions of the lease, Ryder was exercising its right to terminate the lease because Honeyspot's failure to complete the paving and other improvements had “materially affect[ed] the Tenant's use and enjoyment of the Premises.”   Ryder also demanded the refund of rents since July 20, 2008, and the $25,000 advance rent which it had paid, and vacated the premises shortly thereafter.   Between the time it took possession of the premises in the summer of 2008, through the time it vacated after March 23, 2009, Ryder had conducted its truck rental operation without interruption.   The court has heard no credible evidence that Honeyspot's failure to complete the final asphalt paving and landscaping or its use of five light poles at an increased height instead of seven poles at a lower light negatively impacted Ryder's use and enjoyment of the premises to any degree whatsoever.   Ryder had paid all rental payments due under the lease through January 31, 2009, and made no lease payments thereafter.   Additionally, Ryder did not reimburse Honeyspot for real estate taxes due in January 2009 (second half of the taxes due on the grand list of October 1, 2007), or thereafter.

After Ryder vacated the premises, Honeyspot sought to mitigate its loss by working with its real estate agent, Frasinelli, to find a new tenant/tenants.⁹  Several desirable uses of the premises, including for bus parking and wind turbines, fell through.   Eventually, the premises had to be rented to several tenants at a lower rate than what Ryder paid.   Because no single tenant was available to rent the entire premises, Honeyspot has had to keep open common driveways through the premises for the different tenants, thereby decreasing the total amount of rentable land.   Nonetheless, in its attempts to mitigate its loss, Honeyspot has succeeded in collecting $65,900 from five different tenants between the time Ryder vacated the premises and November 30, 2011.   As of the time of trial, Honeyspot was collecting $4,000 per month rent in mitigation of its loss.

Further factual findings are set forth below when necessary to resolve the parties' specific claims.

DISCUSSION

I

The resolution of this matter turns on the issue of what the rights and obligations of the parties to this commercial lease were once one or both of the parties defaulted in their obligations.  “[A] lease is a contract, and, therefore, it is subject to the same rules of construction as other contracts ․ The standard of review for the interpretation of a contract is well established.   Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact ․ [when] there is definitive contract language, the determination of what the parties intended by their ․ commitments is a question of law ․ In construing a written lease ․ three elementary principles must be [considered]:  (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 ․ Furthermore, when the language of the [lease] is clear and unambiguous, [it] is to be given effect according to its terms.   A court will not torture words to import ambiguity [when] the ordinary meaning leaves no room for ambiguity ․ Similarly, any ambiguity in a [lease] must emanate from the language used in the [lease] rather than from one party's subjective perception of [its] terms.”  (Citations omitted;  internal quotation marks omitted.)  Bristol v. Ocean State Job Lot Stores of Connecticut, Inc., 284 Conn. 1, 7–8, 931 A.2d 837 (2007).   The lease in question contains provisions which speak to both the rights and obligations of the landlord as well as the tenant with regard to questions of default.   The court finds the provisions of the lease agreement to be clear and unambiguous.

With regard to default by the landlord, the lease's general default provision, paragraph twenty, provides in relevant part:  “In the event Landlord fails to perform any of its obligations hereunder, Landlord shall be entitled to a reasonable period of time after notice from Tenant to cure such default;  provided however that such reasonable period shall not exceed thirty (30) days unless the default, by its nature, cannot be cured in fewer than thirty (30) days ․ In the event Landlord does not cure its default within the time allowed hereby, Tenant may, at its option, cure Landlord's default and deduct the reasonable cost thereof from the rent ․ In the event Landlord's default materially affects Tenant's use and enjoyment of the Premises, Tenant may, without prejudice to any other remedy available at law or in equity, terminate this Lease upon written notice to Landlord.”   In addition, amended paragraph 3.C., a specific default provision, provides in relevant part:  “In the event that such Final Asphalt Application is not completed, approved and accepted by Tenant on or before July 20, 2008, Tenant shall withhold rent until such time that the final asphalt application is completed.   Upon the approval and acceptance of the Final Asphalt Application by Tenant, Tenant shall pay the pro-rated portion of the remainder of the month's rent.”

With regard to default by the tenant, paragraph nineteen of the lease provides in relevant part:  “If Tenant fails to pay any installment of rent when due, and such failure continues for a period of ten (10) days after Tenant's receipt of written notice from Landlord, or if Tenant fails to perform any obligation hereunder and such failure continues for a period of thirty (30) days after receipt of written notice from Landlord specifying the nature of the default and demand for performance ․ Landlord may (a) declare the term ended and enter into the demised Premises ․ or (b) relet the Premises applying the rental from the new tenant to this lease, and Tenant shall be responsible for the balance that may be due, should a balance exist to the end of the term ․ Landlord shall mitigate its damages in the event of any such default by Tenant.”

Despite the parties' apparent September 2008 agreement to a lease modification for a rental advance by Ryder to provide the funding to enable Honeyspot to complete the paving, no written and executed modification to the lease, as expressly required by its terms, was ever produced.   Honeyspot was bound by the terms of the original lease as amended on April 15, 2008, and the court finds that Honeyspot was in default by its failure to complete the final paving by July 20, 2008, and its failure to complete the installation of the remaining light poles and landscaping.   Ryder's remedies were to withhold rent until the paving was complete and/or complete the improvements itself and deduct the cost from future rent payments.   The court cannot find, however, that Honeyspot's failure to complete the paving and other improvements materially affected Ryder's use and enjoyment of the premises.   Thus, Ryder was not entitled to terminate the lease.   The court finds that Ryder's repudiation of the lease by its written communication dated March 23, 2009, and its subsequent abandonment of the premises, was a total breach of the lease agreement.

“[A] lease is a contract ․ and the rules applying to contracts generally with respect to breach, the right to damages for breach, and the measure of damages, apply to leases as well as contracts ․ It is a general rule of contract law that a total breach of the contract by one party relieves the injured party of any further duty to perform further obligations under the contract ․ When a breach of contract occurs, the contract is not put out of existence, though all further performance of the obligations undertaken by each party may cease.   It survives for the purpose of measuring the claims arising out of the breach.”  (Citations omitted;  internal quotation marks omitted.)   Rokalor, Inc. v. Connecticut Eating Enterprises, Inc., 18 Conn.App. 384, 391–92, 558 A.2d 265 (1989).   Accordingly, Honeyspot was justified in considering Ryder's repudiation of the lease to be a total breach.   The court finds Honeyspot discharged of its remaining duties of performance under the agreement, including the obligation to complete the paving and other improvements, and to provide notices, both pretermination and termination, prior to seeking damages to which it is entitled under the terms of the lease.   The law does not require a party to engage in an act that would be futile.   Connecticut Light & Power Co. v. Costello, 161 Conn. 430, 441, 288 A.2d 415 (1971).

II

Ryder contends that by serving a notice to quit in March 2009, prior to Ryder's repudiation of the lease, Honeyspot terminated the lease agreement, and that the service of the notice had the effect of relieving Ryder of all future obligations to pay rent.   The court finds that Honeyspot failed to provide Ryder with a pretermination notice triggering a ten day right to cure as required under the terms of the lease.

A landlord cannot commence eviction without first complying with the notice and compliance provisions of a lease.   See Norwalk Mall Venture v. Mijo, Inc., 11 Conn.App. 360, 367–68, 527 A.2d 1202 (1987).  “The failure of a commercial landlord to comply with the default notice terms and conditions of the written lease between the parties deprives the court of subject matter jurisdiction since there was no preexisting default in the terms of the lease.  Thomas E. Golden Realty Co. v. Society for Savings, 31 Conn.App. 575, 580, 626 A.2d 788 (1993).   The failure of a lessor to properly comply with a contractual cure period in a commercial lease by not granting a tenant the opportunity to comply with a claimed default renders a subsequent summary process proceeding defective.”   Mill Pond Properties, LLC v. Moe's Tire & Auto Center, LLC, Superior Court, judicial district of Hartford, Housing Session, Docket No. HDSP 155885 (April 7, 2010, Gilligan, J.) [49 Conn. L. Rptr. 843].

Here, the service of the notice and expiration of the period of time in which Ryder would have the right to cure are prerequisites to Honeyspot's right to terminate the lease.   Because Honeyspot failed to give the required pretermination notice, the court finds the notice to quit a nullity and ineffective to terminate the lease.   The court finds no merit to Ryder's claim that Honeyspot had effectively terminated the lease.

Ryder claims, in the alternative, that the service of the notice to quit was a breach of Ryder's right to quiet enjoyment of the premises, tantamount to a constructive eviction.  “[A] constructive eviction arises where a landlord, while not actually depriving the tenant of possession of any part of the premises leased, has done or suffered some act by which the premises are rendered untenantable, and has thereby caused a failure of consideration for the tenant's promise to pay rent ․ In addition to proving that the premises are untenantable, a party pleading constructive eviction must prove that (1) the problem was caused by the landlord, (2) the tenant vacated the premises because of the problem, and (3) the tenant did not vacate until after giving the landlord reasonable time to correct the problem ․ Moreover, whether the premises are untenantable is a question of fact for the trier, to be decided in each case after a careful consideration of the situation of the parties to the lease, the character of the premises, the use to which the tenant intends to put them, and the nature and extent by which the tenant's use of the premises is interfered with by the injury claimed.”  (Citations omitted;  internal quotation marks omitted.)  Welsch v. Groat, 95 Conn.App. 658, 662, 897 A.2d 710 (2006).   The court finds no merit to Ryder's alternate claim of constructive eviction.

III

Ryder has asserted two counterclaims sounding in breach of contract seeking to recover, respectively, rent paid for the period from July 20, 2008, through January 31, 2009, and the $25,000 advance rent which it paid pursuant to the terms of the lease.   Ryder argues that no rent was due to Honeyspot after July 20, 2008, because of Honeyspot's failure to complete the paving.   Ryder also argues that it is due a refund of that portion of the $25,000 advance rent paid at the inception of the lease for which it has not yet received a credit against monthly payments accruing after July 20, 2008.   Honeyspot has responded to Ryder's counterclaims with the special defenses of waiver and equitable estoppel.   As to rent payments due and paid by Ryder for the period from August 1, 2008, through January 31, 2009, the court finds Ryder's recovery is barred by both the doctrines of waiver and equitable estoppel.

“Waiver is the intentional relinquishment or abandonment of a known right or privilege ․ [V]arious statutory and contract rights 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.)  C.R. Klewin Northeast, LLC v. Bridgeport, 282 Conn. 54, 87, 919 A.2d 1002 (2007).

“Equitable estoppel is a doctrine that operates in many contexts to bar a party from asserting a right that it otherwise would have but for its own conduct.”  Glazer v. Dress Barn, Inc., 274 Conn. 33, 60, 873 A.2d 929 (2005).  “[I]n Connecticut, the doctrine of equitable estoppel ․ requires proof of two essential elements:  [First] the party against whom estoppel is claimed must do or say something calculated or intended to induce another party to believe that certain facts exist and to act on that belief;  and [second] the other party must change its position in reliance on those facts, thereby incurring some injury ․ It is fundamental that a person who claims an estoppel must show that he has exercised due diligence to know the truth, and that he not only did not know the true state of things but also lacked any reasonably available means of acquiring knowledge.”  (Citation omitted;  internal quotation marks omitted.)  Celentano v. Oaks Condominium Ass'n., 265 Conn. 579, 614–15, 830 A.2d 164 (2003).  “Strong public policies have long formed the basis of the doctrine of equitable estoppel.   The office of an equitable estoppel is to show what equity and good conscience require, under the particular circumstances of the case, irrespective of what might otherwise be the legal rights of the parties ․ No one is ever estopped from asserting what would otherwise be his right, unless to allow its assertion would enable him to do a wrong.”  (Citation omitted;  internal quotation marks omitted.)   W. v. W., 256 Conn. 657, 661, 779 A.2d 716 (2001).

In the present case, Ryder did not withhold rent in August or September 2008, because it was in discussions with Honeyspot relative to providing the funds as a rent advance necessary to complete the paving.   By September 15, 2008, Ryder had reached an agreement in principal with Honeyspot and for that reason continued to pay rent through January 2009.   Ryder, in effect, held the agreement in its “corporate pocket” without ever preparing the written modification necessary to legally bind itself.   By January, Ryder had made a deal to buy Edart and no longer needed the facility it was renting from Honeyspot.   Indeed, Ryder's director of rentals, Gallant, in a phone call to Stavola in January or February 2009, admitted that Ryder “wanted out” of the lease.   Throughout this time there were at least six individuals, employees and/or agents of Ryder, ranging from construction managers, sales managers, senior managers to legal counsel, involved in the negotiations with Honeyspot and/or the decision making process.   The court finds that Ryder's failure to exercise its right to withhold rent for the period of time in question, August 2008, through January 2009, was a knowing, calculated and intentional relinquishment of its rights which Ryder is now estopped from asserting.

The court finds that the actions, conduct and communications of Ryder's agents and employees were calculated and intended to induce Stavola and Honeyspot to believe that Ryder:  agreed to provide a $100,000 rental advance to Honeyspot to provide the funds necessary to complete the paving and improvements, would provide a written modification to the lease to effect an amendment and calculated and intended to induce Stavola and Honeyspot to act on that belief.   Stavola, in reliance on Ryder's communications and conduct, declined to accept the financing available to Honeyspot from Massimino, put the completion of the paving and improvements on hold and waited for the written amendment.   By the end of January 2009, Ryder “pulled the rug out” from under Honeyspot, reneging on the parties' understanding and called Honeyspot in default.   Honeyspot was thus at a severe disadvantage because it could not complete the paving until the asphalt plants opened in May. Honeyspot faced the loss of four to five months' rent.   The court finds Honeyspot has been injured as a result of its reliance upon Ryder.   Further, the court finds that Stavola was justified in his reliance upon the communications and conduct of Ryder's agents and employees and that he used due diligence in his interactions with them.

As to that portion of the $25,000 advance rent paid at the inception of the lease for which Ryder has not yet received a credit against monthly payments accruing after July 20, 2008, the court finds that Ryder is barred from recovery in damages for the reasons stated above.   Nonetheless, Ryder is due, as an offset, such amounts against damages due Honeyspot as calculated below.

IV

Connecticut law is clear that “[i]n an action for rent due, a lessor of commercial property is generally under no obligation to mitigate his damages after the lessee fails to pay rent ․ Such an obligation arises only if the lessor manifests an intent to terminate the tenancy either by taking an unequivocal act showing this intent or by bringing an action for damages based on the tenant's breach of contract.”  (Citation omitted.)  Dewart Building Partnership v. Union Trust Co., 4 Conn.App. 683, 687, 496 A.2d 241 (1985).   In other words, “[w]hen the lessee breaches a lease for commercial property, the lessor has two options:  (1) to terminate the tenancy;  or (2) to refuse to accept the surrender ․ Where the landlord elects to continue the tenancy, he may sue to recover the rent due under the terms of the lease.   Under this course of action, the landlord is under no duty to mitigate damages ․ When the landlord elects to terminate the tenancy, however, the action is one for breach of contract ․ and, when the tenancy is terminated, the landlord is obliged to mitigate his damages.”  (Citations omitted;  internal quotation marks omitted.)  Brennan Associates v. OBGYN Specialty Group, 127 Conn.App. 746, 754, 15 A.3d 1094, cert. denied, 301 Conn. 917, 21 A.3d 463 (2011).   “The duty to mitigate damages [does] not require the plaintiff [landlord] to sacrifice any substantial right of its own ․ or to exalt the interests of the tenant above its own ․ It [is] required to make reasonable efforts to minimize damages.   What constitutes a reasonable effort under the circumstances of a particular case is a question of fact for the trier ․ [T]he general rule for the measure of damages in contract is that the award should place the injured party in the same position as he would have been in had the contract been performed.”  (Internal quotation marks omitted.)  Id., quoting Danpar Associates v. Somersville Mills Sales Room, Inc., 182 Conn. 444, 446, 438 A.2d 708 (1980).

Here, the terms of the lease, paragraph nineteen, essentially set forth an election of remedies for the landlord.   The present lease does require, however, the landlord to mitigate damages, whichever remedy it elects.   The court finds that Honeyspot has elected to continue the lease, entitling it to damages “for the balance that may be due ․ to the end of the term,” and has fulfilled its obligation to attempt to mitigate damages.

The court calculates damages as follows:

Damages through the time of trial:

Rent from April 1, 2009 through March 31, 2010

@$12,700/mo.–12 months $152,400.00

Rent from April 1, 2010 through January 31, 2012

@$13,200/mo.–22 months $290,400.00

Late charges through January 31, 2012 @5% $ 22,140.00

Taxes:  Grand list of 2007 due January 2009 $ 5,230.64

Grand list of 2008 due July 2009/January 2010 $ 12,301.48

Grand list of 2009 due July 2010/January 2011 $ 15,237.37

Grand list of 2010 due July 2011/January 2012 $ 15,560.44

Future damages:

Rent from February 1, 2012 through March 31, 2013

@$13,200/mo.–14 months $184,800.00

Subtotal:  $698,069.93

The court calculates set-offs as follows:

Rent received in mitigation through November 15, 2011 -$ 65,900.00

Projected future rent receipts in mitigation based upon

tenancies and rent receipts as of time of trial—December

1, 2011 through March 31, 2013—16 mos. @$4,000 -$ 64,000.00

Remaining credit due on original $25,000 rent advance -$ 17,000.00

Cost to complete paving and improvements as conceded

by Honeyspot -$100,000.00

Net damages to plaintiff $451,169.93

The court does not award damages for future real estate tax reimbursements on the grand list of 2011 due and payable in July 2012, and January 2013, because no evidence has been presented that the tax rates have been set by the Town of Stratford and it considers any attempt to estimate the taxes to be speculative.   The court also declines to award interest at the delinquent tax rate as requested by Honeyspot.

CONCLUSION

For the foregoing reasons, and taking into account the defendant's demand for set-off, the court enters judgment on the plaintiff's complaint in the amount of $451,169.93 against the defendant, and enters judgment on the defendant's counterclaims in favor of the plaintiff.   The court orders the matter to be scheduled for further proceedings on the issue of an award of attorneys fees pursuant to the terms of the lease agreement.

Michael G. Maronich, Judge

FOOTNOTES

FN1. Ryder used the premises as a truck rental facility, including sales, parking of vehicles and other related activities..  FN1. Ryder used the premises as a truck rental facility, including sales, parking of vehicles and other related activities.

FN2. The written lease originally provided for a commencement date of no later than March 1, 2008.   The amendment was a written memorandum dated March 13, 2008, and accepted and acknowledged on April 15, 2008..  FN2. The written lease originally provided for a commencement date of no later than March 1, 2008.   The amendment was a written memorandum dated March 13, 2008, and accepted and acknowledged on April 15, 2008.

FN3. These five light poles had an increased pole height delivering a greater foot candle lighting level than originally specified..  FN3. These five light poles had an increased pole height delivering a greater foot candle lighting level than originally specified.

FN4. The Ryder account was DaCosta's sole responsibility as an employee of Johnson Controls, Inc. during this time..  FN4. The Ryder account was DaCosta's sole responsibility as an employee of Johnson Controls, Inc. during this time.

FN5. DaCosta testified:  “I thought the terms of the deal would be put into an amortization schedule as an amendment to the lease.”   DaCosta further testified that he told Stavola the lease would be amended..  FN5. DaCosta testified:  “I thought the terms of the deal would be put into an amortization schedule as an amendment to the lease.”   DaCosta further testified that he told Stavola the lease would be amended.

FN6. Stavola testified that his experience with Ryder was that Ryder moved slowly and that the delay in getting the lease amendment raised no red flags for him..  FN6. Stavola testified that his experience with Ryder was that Ryder moved slowly and that the delay in getting the lease amendment raised no red flags for him.

FN7. Indeed, Stavola testified that sometime during January or February 2009, he had a phone conversation with Gallant during which Gallant told him that Ryder wanted out of the lease.   Ryder had apparently purchased a Stratford based truck rental business, Edart Trucking, and no longer needed the facility it had rented from Honeyspot..  FN7. Indeed, Stavola testified that sometime during January or February 2009, he had a phone conversation with Gallant during which Gallant told him that Ryder wanted out of the lease.   Ryder had apparently purchased a Stratford based truck rental business, Edart Trucking, and no longer needed the facility it had rented from Honeyspot.

FN8. The court notes that the parties stipulated to enter the notice as an exhibit, but that it does not contain a completed return by any servicing officer.   The court heard no testimony as to the method or date of service or the circumstances of Ryder's actual receipt of the notice.   The notice itself does indicate that it was “sent” to both Ryder and Johnson Controls at the same address in Miami, Florida..  FN8. The court notes that the parties stipulated to enter the notice as an exhibit, but that it does not contain a completed return by any servicing officer.   The court heard no testimony as to the method or date of service or the circumstances of Ryder's actual receipt of the notice.   The notice itself does indicate that it was “sent” to both Ryder and Johnson Controls at the same address in Miami, Florida.

FN9. Frasinelli testified that efforts to find renters were made through the internet, signage and several exclusive rental networks that he had access to.   He testified that the market was considerably worse than it was during the summer of 2008, when Ryder took possession..  FN9. Frasinelli testified that efforts to find renters were made through the internet, signage and several exclusive rental networks that he had access to.   He testified that the market was considerably worse than it was during the summer of 2008, when Ryder took possession.

Maronich, Michael G., J.