Woodbridge Associates of Delaware, Limited Partnership v. LLC (2013)

MEMORANDUM OF DECISION

The plaintiff, Woodbridge Associates of Delaware, Limited Partnership (Woodbridge), commenced this action on October 5, 2011.   The operative complaint, Woodbridge's amended complaint dated April 27, 2012, is brought in three counts, breach of contract as to the defendant Mediterranea, LLC (Mediterranea) and counts of conversion against Mediterranea and the defendant, Omar Rajeh (Rajeh).   Rajeh has responded with a special defense claiming Woodbridge has failed to mitigate its damages and with a claim of setoff for electrical work completed outside the scope of the parties' written agreement.   This matter went to trial commencing on February 28, 2013, and on various dates through March 8, 2013.

FACTS

The court makes the following findings of fact.   Woodbridge is a limited liability company.   Mediterranea is a limited liability company whose sole member and owner is Rajeh.   By written sublease agreement dated August 1, 2005, Woodbridge, as landlord, entered into an agreement with Mediterranea, as tenant, for commercial space in a small strip mall located at 1666 Litchfield Turnpike in the town of Woodbridge for an initial term of five years commencing February 1, 2006.   By written notice dated June 17, 2009, Mediterranea exercised its option to extend the lease for an additional five-year term through January 31, 2016.   The premises consisted of approximately 1,000 sq. ft. with a storefront.   Prior to the lease agreement between the parties Woodbridge had undertaken an extensive renovation of the building structure, including the roof and exterior walls, and the adjacent parking lot.   Mediterranea took the premises as an empty shell and agreed to build out the premises as a restaurant.   The work included building all interior walls and partitions, installation of the electrical system and light fixtures, installation of a complete HVAC system, installation of plumbing fixtures including sinks and installation of all restaurant fixtures necessary including exhaust fans and hoods.   All work was to be completed at the sole cost and expense of Mediterranea and, pursuant to the terms of the lease, all structures and fixtures installed by the tenant other than “movable trade fixtures and decorations” became the property of Woodbridge.   Mediterranea took possession of the premises and completed the build out of the restaurant.

During early 2007, Mediterranea defaulted in its obligation to pay rent and Woodbridge commenced a summary process action.   That action was resolved by way of a stipulated judgment in which Mediterranea acknowledged an arrearage of rent/use and occupancy in the amount of $3,963.19 through June 1, 2007.   Pursuant to the terms of the judgment, Mediterranea complied with the conditions set forth therein and was reinstated as a tenant in good standing on June 15, 2007.   The court takes judicial notice of that action which bears docket number NHSP–088036.   By late 2010, Mediterranea had once again defaulted in its obligation to pay rent.   A notice to quit was served on Mediterranea in June 2011 and, in that same month, a second summary process action was commenced.   The matter went to trial on September 13, 2011, and resulted in a judgment of possession in favor of Woodbridge and against Mediterranea based on non-payment of rent.   On September 21, 2011, counsel for Mediterranea contacted counsel for Woodbridge to advise him that Rajeh had completed moving Mediterranea's trade fixtures and personal property from the premises and that Mediterranea was surrendering possession to Woodbridge.   Woodbridge immediately sent a locksmith out to change the locks on that date.   The locksmith, Michael Martinez, testified that when he arrived at the premises he re-keyed the locks so that Woodbridge's master key would not work.   Further, Martinez testified that upon arrival he saw no signs of forced or wrongful entry.   The cost of the work was $127.62.

The following day, on September 22, 2011, Deborah Kern, a property manager for Woodbridge, went to inspect the premises.   She gained access through use of Woodbridge's master key.   Upon entering the premises she saw no signs of forced or wrongful entry.   Once inside she discovered that the premises had been left in a distressed condition.   Ceiling tiles were missing.   Some of the light fixtures had been removed and there was missing duct work.   Upon further inspection, she discovered that the furnace had been removed along with plumbing fixtures including kitchen sinks, the grease trap, the front door closer and the exhaust fan and hood.   In addition, sprinkler heads had been painted over and garbage, including rotting food, had been left behind.   The following day when she was able to gain access to the roof, she discovered that the air conditioning condenser had been removed.

Once Woodbridge recovered possession it immediately began efforts to market the premises.   Efforts to re-let the premises included listing on the multiple listing service and other internet sites, placing signs at the mall in which the premises was located, advertising the premises at trade shows, sending target mailing to prospective renters and networking with other brokers.   Woodbridge's efforts produced three prospective renters, one of whom was a former manager of Mediterranea, Jamil Daoud.   Ultimately, Daoud did not have an adequate credit rating and the cost of putting the premises back in operation was too great for his budget.   In fact, the condition in which the premises had been found when Woodbridge regained possession, with missing HVAC system and missing plumbing and electrical fixtures, proved to be a deterrent to other prospective renters as well.   Despite the best efforts of Woodbridge, the premises has remained vacant through the time of trial.

As the court has noted, Mediterranea is a limited liability company whose sole member and owner is Rajeh.   At the time Mediterranea executed the lease, Dan Charest, the operations manager for Woodbridge, gave Rajeh the only key to the premises in Woodbridge's possession.   The premises has only a front door.   At that time, Charest also advised Rajeh in writing to immediately change the lock for security reasons.   Rajeh testified that he never re-keyed the locks.   Over the course of the years, Rajeh gave several keys to various managers and employees of Mediterranea.   During the entire time in which Mediterranea and Rajeh were in possession, none of Woodbridge's employees or agents ever entered the premises without Rajeh or one of its employees or agents being present.   Rajeh claimed he was not a “hands on” owner of Mediterranea.   In fact, he operated a second restaurant owned by Mediterranea and relied upon a succession of managers to run the restaurant located in the subject premises.   Rajeh testified that he had not been physically present at the premises for many months prior to the entry of judgment in the summary process action on September 13, 2011.

After the entry of judgment on September 13, 2011, Rajeh returned to the restaurant on Thursday, September 15, 2011, and Friday, September 16, 2011, to remove his trade fixtures and personal property.   On the first of those days, Rajeh, with the assistance of several friends, removed all of the heavy items for which they rented a truck.   On the second day, he returned with his cousin to remove the small items.   Rajeh claims that when he entered the premises on the first day he found the grease trap missing.   He also claims that all of the other items found missing by Deborah Kern when she entered the premises on September 22, 2011, i.e, the HVAC system, lighting and electrical fixtures, sinks and plumbing fixtures and exhaust fan and hood, were present.   Several of Rajeh's friends who helped him move on September 15, 2011, corroborated his testimony.   He denies that he removed these items and insists that he saw them there when he locked the doors for the last time on September 16, 2011.   Rajeh denied that he returned to the premises at any time between September 16, 2011, and the date that he formally surrendered possession, September 21, 2011.   During this five day time frame, a tenant at an adjacent shopping center complained to Charest that someone from the Mediterranea Restaurant was dumping spoiled food in his dumpster.   None of the other tenants in the mall where the premises is located saw anyone other than Rajeh, either with his helpers or alone, removing anything from the premises.

The summary process action had been contentious.   Rajeh was attempting to sell his business and wanted Woodbridge to consent to an assignment of lease.   Woodbridge did not find Rajeh's buyer, Daoud, creditworthy and would not consent.   The court heard testimony that the summary process trial resulted in hard feelings and that Rajeh expressed anger at the result when the judgment was read in open court on September 13, 2011.

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

DISCUSSION

I

Woodbridge's first count sounds in breach of contract against Mediterranea.   “The existence of a contract is a question of fact to be determined by the trier on the basis of all of the evidence.”  (Internal quotation marks omitted.)  Aquarion Water Co. of Connecticut v. Beck Law Products & Forms, LLC, 98 Conn.App. 234, 238, 907 A.2d 1274 (2006).  “[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 court finds that Mediterranea breached the lease by its failure to pay rent.   The court also finds that Woodbridge has made adequate and reasonable attempts to mitigate its loss through its efforts to find another tenant.   As to damages for rent and other charges due pursuant to the terms of the lease, the court finds the following sums due to Woodbridge by Mediterranea

Payments due under the lease through the

date of the summary process judgment:

Base rent 9,015.74

Common area maintenance fees 2,903.91

Property tax reimbursement 2,911.47

Water charges 400.00

Subtotal 15,231.12

Payments due October 1, 2011 through

March 31, 2013

Base rent 16,500.06

Common area maintenance fees 6,462.00

Property tax reimbursement 3,217.14

Subtotal 26,179.20

Cost and fees of summary process 5,329.82

Total 46,740.14

The court finds that Mediterranea further breached the lease by the damaged condition in which it left the premises and by its removal of systems and fixtures which, pursuant to the lease, had become the property of Woodbridge.   The credible evidence supports damage claims as follows:

Replace missing HVAC equipment 7,019.00

Replace missing grease trap 6,436.22

Replace missing kitchen sinks 6,610.94

Replace missing front door closer 180.79

Replace missing ceiling lights

and electrical switches 930.56

Replace sprinkler heads 950.00

Replace missing exhaust fan 1,800.00

Clean up of premises 132.94

Re-key front door 127.62

Total 24,188.17

In addition, Woodbridge requests attorneys fees pursuant to the provisions of the lease in the amount of $13,964.13, which the court finds reasonable given the nature and scope of the litigation.

Mediterranea asserts a setoff, in the amount of $7,000 for the cost of running an electrical line from the main electrical panel in the utility room of the mall to the premises, which it claims is outside the scope of the work it agreed to do as part of the build out of the premises and which it claims Woodbridge, through its manager, Charest, had agreed to by way of a rent credit.   Charest denies making such an agreement and any amendments to the lease are barred unless in writing, pursuant to the provisions of the lease.   Further, any such claims would have been resolved when the parties entered into the stipulated judgment in the first summary process action and agreed as to the amount of the arrearage.   As the court has noted above, any such arrearage claims were resolved by that stipulation and Mediterranea's subsequent reinstatement.

II

Woodbridge brings the second count of its complaint against Rajeh in conversion and is requesting that the court award punitive damages and attorneys fees.   Woodbridge has not requested treble damages pursuant to General Statutes § 52–564, and asserts that its claim is not based on statutory theft.

“Conversion occurs when one assumes and exercises the right of ownership over property belonging to another, without authorization and to the exclusion of the owner's rights ․ The intent required for a conversion is merely an intent to exercise dominion or control over an item even if one reasonably believes that the item is one's own.”  Plikus v. Plikus, 26 Conn.App. 174, 180, 599 A.2d 392 (1991).  “The general rule is that the measure of damages in a conversion is the value of the goods at the date of the conversion ․ although this is not an exclusive determination ․ Additionally, a wrongdoer should not be allowed to benefit from his misdeed ․ He should not be allowed to retain a converted item, which may have greatly increased in value, and pay a lesser amount.   Under the general rule, damages totaling the value of the item at the time of conversion plus consequential damages and interest may still be less than the value of the item itself.”  (Citations omitted.)  Id., 178.

“Statutory theft under § 52–564 is synonymous with larceny under General Statutes § 53a–119 ․ Pursuant to § 53a–119, [a] person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or [withholds] such property from an owner ․ Conversion can be distinguished from statutory theft as established by § 53a–119 in two ways.   First, statutory theft requires an intent to deprive another of his property;  second, conversion requires the owner to be harmed by a defendant's conduct.   Therefore, statutory theft requires a plaintiff to prove the additional element of intent over and above what he or she must demonstrate to prove conversion.”  (Internal quotation marks omitted.)  Deming v. Nationwide Mutual Ins. Co., 279 Conn. 745, 771, 905 A.2d 623 (2006).

This claim against Rajeh is based in tort.   Rajeh is not a party to the lease.   The claim against Rajeh is based entirely on circumstantial evidence.   No one saw him remove the furnace, air conditioning condenser, sinks, light fixtures, grease trap and exhaust fan.   Rajeh, however, was the sole member and owner of Mediterranea and, as such, was in possession and control of the premises despite his claims to being a “hands off” owner.   Rajeh claims all of the missing items were at the premises when he last locked the doors on Friday, September 16, 2011, except for the grease trap.   He claims that he never returned.   However someone was there still cleaning the restaurant out after that date.   We know this because a tenant at a neighboring mall complained to Charest that someone from the Mediterranean Restaurant was throwing rotting food in their dumpster during the intervening five days.   Further, there were no signs of a forced entry when Woodbridge regained possession on September 21, 2011.   Rajeh was angry that Woodbridge would not consent to the assignment of his lease to the prospective buyer of his restaurant.  “[I]t is the trier's exclusive province to weigh the conflicting evidence, determine the credibility of witnesses and determine whether to accept some, all or none of a witness' testimony.”  (Internal quotation marks omitted.)  Hoffer v. Swan Lake Ass'n., Inc., 66 Conn.App. 858, 861, 786 A.2d 436 (2001).   The court finds Rajeh's denials simply not credible.   He had both motive and opportunity.   There exists no credible evidence for how these items were taken other than by Rajeh or at his direction.   The evidence is sufficient, and the court so finds, that Rajeh exercised ownership and possession over property belonging to Woodbridge without authorization and to the exclusion of the rights of Woodbridge.   Since there is no market for used equipment for the systems and fixtures wrongfully taken, the court uses replacement cost as the proper measure of damages and considers any difference between the value of the old equipment taken and replacement cost with new equipment to be an element of consequential damages permissible as damages under an action in conversion.   The court finds Rajeh liable to Woodbridge for damages in the amount of $23,927.61 and refers to its discussion above as to how the damages break down.

III

Woodbridge brings the third count of its complaint against Mediterranea in conversion, claiming damages for the value of the systems and fixtures removed from the premises.   This count seeks damages for some of the same items of loss as claimed by Woodbridge in its breach of contract claim against Mediterranea.  “It is true, of course, that out of a contractual relationship a tort liability, as in negligence, may arise.   See, for instance, cases such as Bifield v. Bruner–Ritter, Inc., 144 Conn. 747, 748, 137 A.2d 751 [ (1958) ];  Wright v. Blakeslee, 102 Conn. 162, 165, 128 A. 113 [ (1925) ].   And it sometimes happens that in such a situation an action is also maintainable in contract for breach of an implied obligation to exercise reasonable care in the performance of a contract.   See cases such as Hickey v. Slattery, 103 Conn. 716, 719, 131 A. 558 [ (1926) ] (surgeon);  Bridgeport Airport, Inc. v. Title Guaranty & Trust Co., 111 Conn. 537, 541, 150 A. 509 [ (1930) ] (title searching company);  Loveland v. Aymett's Auto Arcade, Inc., 121 Conn. 231, 235, 184 A. 376 [ (1936) ] (installer of an oil burner).  [The Supreme Court] has adopted the view that the “ ‘[m]odern tendency is to make the fundamental nature of the obligation the test as to whether the action is founded upon either tort or contract.’  “ Dean v. Hershowitz, 119 Conn. 398, 405, 177 A. 262 [1935] (quoting from Bohlen, Studies in the Law of Torts, 87).”  Kaplan v. Merberg Wrecking Corporation, 152 Conn. 405, 410, 207 A.2d 732 (1965).   The court therefore views contract as the proper theory of recovery and declines to enter judgment in favor of Woodbridge based upon the tort of conversion.

CONCLUSION

For the foregoing reasons, and on the basis of the court's factual findings, the court enters judgment in favor of the plaintiff, Woodbridge, against the defendant, Mediterranea, on the first count in the amount of $70,928.31 plus attorneys fees of $13,964.13.   Further, the court enters judgment in favor of the plaintiff, Woodbridge, against the defendant, Rajeh, on the second count in the amount of $23,927.61.

Michael G. Maronich, Judge

Maronich, Michael G., J.