Gayle A. Bellini v. The Patterson Oil Company (2013)

MEMORANDUM RE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT—# 134 DEFENDANT'S MOTION FOR SUMMARY JUDGMENT—# 147

I. Nature and History of the Proceedings

On August 15, 2011, the plaintiff, Gayle Bellini, filed a revised complaint (# 109) against the defendant, The Patterson Oil Company, a Connecticut corporation, alleging that the defendant breached a commercial lease agreement (“lease”) by abandoning the premises prior to the expiration of the extended lease term.¹  The complaint alleges the following relevant facts.   By lease agreement dated November 1, 1989, the plaintiff, as lessor, and the defendant, as lessee, agreed to the lease of the commercial real estate (“premises”).   Although the lease was effective as of that date, the defendant had occupied the leased premises for two years prior thereto.   The parties executed an addendum to the lease on October 16, 1990.   Without otherwise modifying the lease agreement, including the addendum, the parties modified the rent from time to time.²  Pursuant to the lease and the addendum, the initial term of the lease was to be automatically extended for five-year terms absent ninety days written notice of intent to terminate the lease.   On or about April 22, 2011, the plaintiff received written notice from the defendant of its intention to abandon the premises on April 30, 2011.   On or about April 30, 2011, the defendant abandoned the premises.   According to the plaintiff, the defendant breached the lease by abandoning the premises prior to the expiration of the extended lease term, which expires on October 31, 2014.   The plaintiff seeks money damages for the loss of the rent and reimbursement for utilities, taxes and insurance premiums that the defendant was allegedly obligated to pay under the lease agreement.

On August 29, 2011, the defendant filed an answer and special defenses (# 110).   In its first special defense, the defendant alleges that the lease terminated when it expired as of April 30, 1996, and the defendant became a month-to-month tenant.   The defendant asserts that when it vacated the premises in April 2011, it did so as a month-to-month tenant.   In its second special defense, the defendant asserts that there was no requirement that it provide ninety days written notice under the terms of the month-to-month tenancy.   The third special defense asserts that the plaintiff has failed to state a claim upon which relief can be granted.   The fourth special defense alleges that the plaintiff failed to mitigate her damages by failing to take reasonable steps to re-let the premises.³

On November 5, 2012, the plaintiff filed a motion for summary judgment on her single-count revised complaint and the first three of the defendant's special defenses, along with a supporting memorandum of law and evidentiary support.   The defendant filed an objection to the plaintiff's motion on January 16, 2013, to which the plaintiff replied on February 4, 2013.   On February 14, 2013, the defendant filed a motion for summary judgment as to its first three special defenses, along with a supporting memorandum of law and evidentiary support.   The plaintiff filed an objection to the defendant's motion on March 6, 2013.   Both motions for summary judgment and the objections thereto were heard at the April 8, 2013, short calendar.

The court, after reviewing all of the documents submitted by the parties, reviewing all the relevant cases and considering the written and oral arguments of counsel, will, for reasons hereinafter stated, deny the plaintiff's motion, grant the defendant's motion and enter judgment in its favor.

II. Summary Judgment

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Sherman v. Ronco, 294 Conn. 548, 553–54, 985 A.2d 1042 (2010).  “[T]he ‘genuine issue’ aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred ․ A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case.”  (Citation omitted;  internal quotation marks omitted.)  Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002).

“In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).

III. Claims of the Parties

A. The Lease and Amendments

Section 18 of the lease, entitled “Renewal Option,” provides that “[t]his [l]ease shall be automatically renewed for an additional five-year term with monthly rental to be negotiated ninety (90) days prior to the renewal date.   This [l]ease shall carry a reciprocal option whereby the [l]essee shall notify the [l]essor by written notice of his election not to renew not less than ninety (90) days prior to the expiration date of the primary term and any extended term thereof.   Lessor shall notify [l]essee by written notice of his election not to renew not less than ninety (90) days prior to the expiration date of the primary terms and any extended term thereof.”   The initial term of the lease commenced on November 1, 1989, and expired on or about October 31, 1994.

By way of a letter dated August 31, 1994, the parties agreed to a one-year extension of the lease.   The letter stated that “[t]he only modification in the [l]ease will be in section 3. RENT,” which now provided that “[t]he annual property rent during the first year of this lease will be twenty-seven thousand six hundred dollars ($27,600.00) ․ commencing November 1, 1994, through October 1, 1995.”   By way of a letter dated October 10, 1995, the parties agreed to extend the one-year extension of the lease for a period of six months, commencing on November 1, 1995, through April 30, 1996, with “[t]he terms and conditions [to] be the same as the one year extension as detailed in the letter of August 31, 1994.”

B. The Plaintiff's Claim

The plaintiff argues that the August 31, 1994 and October 10, 1995 letters did not modify the renewal option contained in section 18 of the lease.   Rather, these letters merely constituted renegotiations of the monthly rent, as contemplated by section 18, and expressly declined to modify any other aspect of the lease agreement.   Thus, the plaintiff asserts, the lease automatically renewed on November 1, 2009, for the fifth five-year term, ending on or around October 31, 2014.⁴  The plaintiff points to the merger clause contained in section 19 of the lease, which provides that “[t]his instrument contains the entire and only agreement between the parties and no oral statements or representation or prior written matter not contained in this instrument shall have any force or effect.   This lease may only be changed, modified or discharged by an agreement in writing executed by the parties hereto.”

C. The Defendant's Position

In contrast, the defendant asserts that the lease terminated on October 31, 1994, and, thereafter, the defendant became a month-to-month tenant.   According to the defendant, ninety days prior to the expiration of the initial lease term was August 2, 1994, and, by that date, neither the plaintiff nor the defendant complied with section 18.   Instead, on August 31, 1994, the defendant sent a letter to the plaintiff concerning an extension of the lease.   This first modification was agreed to by both parties and provided for a one-year lease extension and rent in the amount of $27,600 annually, with the new term commencing on November 1, 1994, and ending October 1, 1995.

The defendant contends that, at the end of this one-year extension, the parties reached another agreement for an extension of the lease on or about October 10, 1995.   This second modification extended the present one-year extension of the lease for a period of six months.   The term of the second modification was November 1, 1995, through April 30, 1996.   The other terms of the first modification remained the same.   The defendant asserts that rent was not modified and the second modification dealt only with an extension of the term.   Following the expiration of the second modification, there were no further written agreements concerning an extension of the lease.

The defendant asserts that between May 1, 1996, and April 2011, it operated under the belief that it was a month-to-month tenant.   The defendant points to the conduct of the parties, noting that they conducted their relationship informally and without reference to the lease.   The defendant contends that any rent modifications were agreed to orally or via email communications, and occurred sporadically.   Thus, when the defendant terminated its tenancy, it did not believe it was bound by any notice requirement under the lease.

IV. Discussion

“Parties to a lease may agree to provide for a tenancy beyond the initial term of the lease in one of two ways;  either by a covenant to renew, which contemplates another lease for a distinct term, or by an agreement to extend the lease, which continues the existing lease and merely enlarges the term thereunder.”  Nowesco, Inc. v. Community Petroleum Products, Inc., 38 Conn.Sup. 585, 587, 456 A.2d 340 (1982), citing City Coal Co. v. Marcus, 95 Conn. 454, 459, 111 A. 857 (1920).  “The distinction between the two is chiefly that in the case of renewal a new lease is requisite, while in the case of extension, upon the performance of the stipulated acts, the same lease continues in force during the additional period.”  Carrano v. Shoor, 118 Conn. 86, 93, 171 A. 17 (1934).  “The question of whether a lease grants a covenant to renew or an agreement to extend is a question of intent.   The question as to which exists may be controlled by the intention of the parties as manifested by the entire lease, or by their practical construction of their contract ․ If the language of the lease is clear and definite, however, the intention of the parties must be gathered from the instrument itself.”   (Citation omitted;  internal quotation marks omitted.)  Nowesco, Inc. v. Community Petroleum Products, Inc., supra, 587–88.  “[T]he use of the word renewal is by no means conclusive.”  Carrano v. Shoor, supra.  “[A] stipulation in a lease intended merely to lengthen its time upon the terms and conditions stated in the original lease is an ‘extension’ ․” 52 C.J.S., Landlord & Tenant § 69 (2003).

However, as an initial matter, before considering whether section 18 acts as a renewal or extension of the lease and the effect of the subsequent writings, this court first must determine whether section 18 of the lease is enforceable.

“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.)  L & R Realty v. Connecticut National Bank, 53 Conn.App. 524, 534, 732 A.2d 181, cert. denied, 250 Conn. 901, 734 A.2d 984 (1999).  “To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties.”  (Internal quotation marks omitted.)  Senco, Inc. v. Fox–Rich Textiles, Inc., 75 Conn.App. 442, 445, 816 A.2d 654, cert. denied, 263 Conn. 916, 821 A.2d 770 (2003).  “So long as any essential matters are left open for further consideration, the contract is not complete.”  (Internal quotation marks omitted.)  L & R Realty v. Connecticut National Bank, supra, 535.  “An agreement to agree to a material term at a later time is no agreement at all.”  (Internal quotation marks omitted.)   Kominski v. O'Keefe, Superior Court, judicial district of Danbury, Docket No. FA 05 4001578 (January 10, 2007, Leheny, J.) (42 Conn. L. Rptr. 650, 652);  see Geary v. Wentworth Laboratories, Inc., 60 Conn.App. 622, 627, 760 A.2d 969 (2000) (“[a] contract requires a clear and definite promise” (internal quotation marks omitted)).

“In order to be enforceable, a provision for extension or renewal must be definite and certain in its terms, particularly the terms with respect to the duration of the additional term and the amount of rent to be paid.”   52 C.J.S., Landlord & Tenant § 74 (2003);  see LaQuerre v. Singh, Superior Court, judicial district of Hartford, Housing Session, Docket No. HDSP 123217 (July 30, 2003, Santos, J.) (35 Conn. L. Rptr. 218, 219) (“[i]n order to be considered valid, a renewal option must contain several essential terms ․ [A]n optioned lease renewal requires agreement by the parties regarding the amount of rent due under the new lease in order to withstand legal scrutiny” (citation omitted;  internal quotation omitted)).  “Thus, where a provision in a renewal or extension option does not specify any guidelines or method for the fixing of the rent, some courts find the provision invalid and unenforceable.   Under this view, because agreements to make an agreement are not specifically enforceable when material terms are left open to future negotiation, determinations of rent for the option period which the option language leaves to negotiation and mutual agreement is unenforceable without a standard for determining rent.”   49 Am.Jur.2d, Landlord & Tenant § 137 (2006).

For example, in Sponzo v. Gooden, Superior Court, judicial district of Hartford, Housing Session, Docket No. CV H9305–4609WI (January 31, 1995, DiPentima, J.) (13 Conn. L. Rptr. 469), the court held that “no new lease under the option to renew was formed between the parties ․ [because] [t]here was no agreement by the parties regarding the amount of rent due under the new lease ․” (Citation omitted.)   The court in LaQuerre v. Singh, supra, 35 Conn. L. Rptr. 219 noted that the approach taken in Sponzo has been largely followed by courts in other jurisdictions in recent years.  “[T]o constitute a valid agreement for the lease of real property, the parties must have reached final agreement upon all its essential terms, without reservation of any term for future negotiations ․ [t]his is especially true of the amount to be paid for rent.”  (Internal quotation marks omitted.)  Id. “[I]t is well settled that a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable ․ This rule is particularly applicable when the rental or sale amount of real property is the missing term ․” (Internal quotation marks omitted.)  Id. “[T]he amount of rental is an essential element of a lease, if not the basis for a lease, and an agreement to make a lease, or to renew or extend a lease, that fails to specify either the amount of the rental or a definite procedure to be followed to establish the amount of the rental, is too indefinite to be legally binding and enforceable.”   (Internal quotation marks omitted.)  Id., citing Edgewater Enterprises, Inc. v. Holler, 426 So.2d 980 (Fl.Dist.Ct.App.1982).

In Edgewater Enterprises, Inc. v. Holler, supra, 426 So.2d 980, 982, the court explained that “we believe that when contracting parties do not agree on an essential provision there is no ‘meeting of the minds' that is the essence of a contract, and in that situation it is not the province of the court to make the contract or to supply material terms or provisions omitted by the parties.”  Id. “[I]f an essential element is reserved for the future agreement of both parties, the promise gives rise to no legal obligation until such future agreement.   Since either party, by the very terms of the agreement, may refuse to agree to anything the other party will agree to, it is impossible for the law to fix any obligation to such a promise.”   Id., 983 n.7. Similarly, in LaFountain v. Estate of Kelly, 732 So.2d 503 (Fl.Dist.Ct.App.1999), in which a lease renewal option “did not specify the rental amount or a method for reaching agreement on the rent ․ the option was ․ unenforceable once the parties failed to agree to an essential element of the lease.”

Likewise, in Insurance Industry Consultants, Inc. v. Essex Investments, Inc., 249 Ga.App. 837, 840–41, 549 S.E.2d 788, cert. denied, Georgia Supreme Court, Case No. S01C1429 (2001), the Georgia Court of Appeals noted that “[t]o be enforceable, [a] provision for the renewal of a lease must specify the terms and conditions of the renewal with such definite terms and conditions that the court may determine what has been agreed upon, and if it falls short of this requirement it is not enforceable.   It must be certain and definite both as to the time the lease is to extend and the rent to be paid.   A provision for renewal need not presently fix all of the terms of the new lease;  it may furnish a certain and definite method for their ascertainment and determination in the future ․ [but] if terms, such as duration and rent, are left for future ascertainment, and no method is provided by which they are to be determined, the contract is unenforceable for uncertainty.”   See Phipps v. Storey, 269 Ark. 886, 601 S.W.2d 249 (1980) (“[a] covenant to renew upon such terms as may be agreed upon is void for uncertainty ․ [The parties] might never agree, and so ․ the contract is too uncertain and indefinite to be enforced”);  Giglio v. Saia, 140 Miss. 769, 106 So. 513 (1926) (“[s]ince the act of agreeing upon a rental requires the exercise of volition, unenforceable in law, a covenant in a lease for the renewal for a term ․ upon such rents as might be agreed upon between the parties is nugatory and confers no substantial right upon either party ․ A covenant in a lease to renew upon such terms as may be agreed upon is too uncertain and indefinite to be enforced” (citation omitted)).

“Although the exact amount of future rent for a renewal term is left to future determination, a renewal clause is enforceable where it contains a formula for the computation of future rent which is capable of being reduced to a sum certain.”   49 Am.Jur.2d, Landlord & Tenant § 138 (2006).   For example, “[a] renewal rent provision providing for changes in rent based on changes in the cost-of-living index or consumer price index is enforceable.   If a definite mode for determining renewal rent is provided by the lease agreement or by operation of law, so that the rental amount can be determined at the time of renewal without negotiation, a court using the provided standard is not making a new contract for the parties, but is instead merely compelling the parties to do what they plainly contemplated in the beginning ․ [A] lease which provides that the tenant may renew the lease for annual rentals to be agreed upon, without further standards, is unenforceable for uncertainty as a matter of law, since neither the tenant nor the landlord is bound to any formula as to the amount of rent, and the words do not leave room for legal construction or resolution of the ambiguity.”  Id.

In the present case, section 18 of the lease provides that “monthly rent [will] be negotiated ninety (90) days prior to the renewal date.”   There is no provision in the lease which provides a formula or mode for determining rent.   The August 31, 1994 letter, which resulted in the one-year extension of the lease, provided for a specific rental amount, commencing November 1, 1994, through October 1, 1995.   The October 10, 1995 letter, which resulted in a six-month extension of the one-year extension of the lease was based on the same terms detailed in the August 31, 1994 letter.

After the six-month period terminated, on April 30, 1996, the evidence indicates that the rent was adjusted on an informal and random basis.   In his affidavit, Russell Patterson, the defendant's current vice-president, attested that “[a]t times the rent was adjusted based upon verbal discussions between the [plaintiff] and [the defendant].   Rent was not established pursuant to any set schedule and there was no reference to any lease between the parties when the rent was established.   For example, in October 2005, [the][p]laintiff sent an email changing the rent by $300.”   Likewise, in his affidavit, Robert Mueller, the defendant's former vice-president, attested that “rental rates changed verbally from time to time without any reference to a lease.”   In her deposition, the plaintiff testified that, with regard to a specific rent increase, she could not state how the rent was negotiated, only that it occurred either by phone or email.   The plaintiff also testified that, on another occasion, she phoned the defendant to discuss an increase in rent because she “hadn't increased the rent in a while and it was just time.”

Moreover, the plaintiff's deposition indicates that, during the initial term of the lease, the parties did not abide by the annual property rent increase schedule set forth in section 3 of the lease.   Rather, the parties informally agreed to variations in the amount of rent.⁵  Furthermore, section 3 of the lease sets out the annual property rent specifically for the first five years, only.   It does not provide for specific rental amounts for the renewal of the lease or for the calculation of any future rental amounts.   The plaintiff also testified in her deposition that she could not recall if the parties ever negotiated rent ninety days before a renewal date of the lease.

Section 18 does not specify the rental amount or a method for reaching agreement on the rent.   In light of the case law cited herein, this court finds that section 18 is too indefinite to be legally binding and enforceable.   The court therefore agrees with the defendant that, upon expiration of the six-month extension of the lease, on or about April 30, 1996, the defendant's tenancy was converted to a month-to-month tenancy and the defendant was not bound by any notice requirement under the lease.   In fact, under an oral month-to-month tenancy, a tenant is not required to give any notice to the landlord of his intention to vacate.   See Roth v. Fugett, Superior Court, judicial district of Stamford–Norwalk, Housing Session, Docket No. SCN 08312–250 (April 5, 1984, Driscoll, J.);   Dascanio v. Carlson, Superior Court, judicial district of Hartford, Housing Session, Docket No. SCH 1801 MR (March 26, 1981).⁶

V. Conclusion

This court finds that the defendant was not bound by any notice requirement under the lease.   The defendant therefore enjoyed a month-to-month tenancy when in April 2011, it opted to vacate the leased commercial premises.   As to the defendant's motion for summary judgment, the court finds that there is no genuine issue of material fact to be determined by a trier of fact.   The defendant's motion is therefore granted as a matter of law.   For the same reasons the plaintiff's motion for summary judgment is denied.   Accordingly, judgment may enter in favor of the defendant as against the plaintiff.

Wilson J. Trombley, Judge

FOOTNOTES

FN1. The leased premises consisted of a full service gasoline station complete with parking spaces and service bays located at 161–163 Main Street, Winstead, CT..  FN1. The leased premises consisted of a full service gasoline station complete with parking spaces and service bays located at 161–163 Main Street, Winstead, CT.

FN2. Attached to the plaintiff's complaint are two letters, dated August 31, 1994, and October 10, 1995, which extended the lease agreement and modified the rent..  FN2. Attached to the plaintiff's complaint are two letters, dated August 31, 1994, and October 10, 1995, which extended the lease agreement and modified the rent.

FN3. By Memorandum Of Decision dated September 28, 2011, the court (Roche, J.) denied the plaintiff's motion to strike the first, second and third special defenses.   The plaintiff did not legally challenge the fourth special defense..  FN3. By Memorandum Of Decision dated September 28, 2011, the court (Roche, J.) denied the plaintiff's motion to strike the first, second and third special defenses.   The plaintiff did not legally challenge the fourth special defense.

FN4. The plaintiff contends that, until April 5, 2011, the defendant never noticed its intent to terminate the lease.   Therefore, the plaintiff asserts, the lease renewed for additional five-year terms on November 1, 1994, November 1, 1999, November 1, 2004 and November 1, 2009..  FN4. The plaintiff contends that, until April 5, 2011, the defendant never noticed its intent to terminate the lease.   Therefore, the plaintiff asserts, the lease renewed for additional five-year terms on November 1, 1994, November 1, 1999, November 1, 2004 and November 1, 2009.

FN5. In her deposition, the plaintiff testified that a document was executed memorializing a temporary rent reduction but that document has gone missing.   The plaintiff asserted that it was an attachment to one of the modification letters..  FN5. In her deposition, the plaintiff testified that a document was executed memorializing a temporary rent reduction but that document has gone missing.   The plaintiff asserted that it was an attachment to one of the modification letters.

FN6. This decision does not contain the name of the authoring judge..  FN6. This decision does not contain the name of the authoring judge.

Trombley, Wilson J., J.