LLC v. Bru Cafe, Inc. (2013)

RULING ON MOTION FOR ORDER DISBURSING FUNDS ON DEPOSIT

The plaintiff, Orange Palladium, LLC, commenced this summary process action based on non-payment of rent against Bru Cafe, Inc. by summons and complaint filed on February 16, 2010.   After a lengthy period of litigation the parties entered into a settlement agreement.   On May 31, 2011 Orange moved for judgment of possession pursuant to the agreement as the result of Bru's failure to comply with the terms for payment of use and occupancy.   On August 25, 2011 the parties stipulated to an extension of the hearing on the motion for judgment pursuant to which Bru deposited the sum of $3,500 with the Clerk of the Housing Court.   On October 6, 2011 after an Audubon hearing to determine the enforceability of the agreement the court (Zemetis, J.) found the agreement valid and enforceable and found Bru in violation of the obligation to pay use and occupancy for May and June 2011.   The court entered judgment of possession on behalf of Orange.   On October 12, 2011 Bru appealed the decision of the trial court.   On July 23, 2013 the appellate court affirmed the judgment of the trial court.  Orange Palladium, LLC v. Ready, 144 Conn.App. 283 (2013).

Although it appears that the court (Zemetis, J.) entered postjudgment orders for use and occupancy payments pending the appeal on several occasions, motion for use and occupancy in lieu of bond in the amount of $3,000 per month granted on November 17, 2011, motion for use and occupancy in the amount of $3,100 per month granted on January 26, 2012 and orders for Bru to post a surety bond in the amount of $27,900 on March 8, 2012, Bru apparently complied with none of these orders.   Finally on March 22, 2012 the court (Zemetis, J.) entered additional orders for use and occupancy in the amount of $3,100 per month commencing March 26, 2012 and monthly thereafter on the first business day of each month.   Bru complied with these orders and made the following payments:  $3,100 on March 26, 2012, $3,100 on April 5, 2012 and $3,100 on May 1, 2012.   After Bru failed to make the June payment Orange filed a motion to terminate the stay.   The motion was heard on July 10, 2012 along with Bru's motion to modify the use and occupancy payments and the stay was ordered terminated by the court (Zemetis, J.).   Execution issued on October 31, 2012 and was levied on November 2, 2012.

Orange now moves the court for an order of distribution of the funds which Bru has paid to the court for use and occupancy in the total amount of $12,800 pursuant to General Statutes §§ 47a–26f and 47a–35b.   Bru objects and requests that the court hold a hearing to determine the respective claims of the parties.   The relevant portions of General Statutes §§ 47a–26f and 47a–35b are identical and provide that “the trial court shall hold a hearing to determine the amount due each party from the accrued payments for use and occupancy and order distribution in accordance with such determination.   Such determination shall be based upon the respective claims of the parties arising during the pendency of the proceedings after the date of the order for payments and shall be conclusive of those claims only to the extent of the total amount distributed.”

The court held a hearing on the motion on November 5, 2013 and finds the following facts.   Between the commencement of this action in February 2010 and its conclusion by issuance and levy of the execution on November 2, 2012 Bru paid a total of $30,300 in use and occupancy payments ($17,500 directly to Orange and $12,800 to the court).   During that same time frame Bru would have paid in excess of $100,000 to Orange in rental payments under the existing lease had Bru not defaulted.   The use and occupancy paid to the court covered the following periods of time:  $3,500 for the period from August 25, 2011 through October 6, 2011 and $9,300 for the months of March, April and May 2012.

Bru asserts that no use and occupancy was paid for June 2012 and thereafter because the premises sustained water damage and Bru used the June payment toward costs of cleanup instead of use and occupancy.   Bru asserted this same argument before the court at the July 10, 2012 at which time the court (Zemetis, J.) rejected the argument, denying Bru's motion to modify the use and occupancy and granting Orange's motion to terminate the stay.

Bru offered evidence of a second instance of water damage on August 10, 2012 when a back flow cap blew off of a sewer runoff pipe after an unusually heavy rain storm, flooding the lower level of the premises with over a foot of water and sewage as well as water damage to the walls and ceiling of the upper level atrium.   Bru claims it was unable to conduct its restaurant and cafe business from the time of the flood until September 30, 2012.   Bru claims over $100,000 in damages for loss of business, business equipment and theft, allegedly by Serve Pro, an independent contractor presumably hired by Orange to remediate the damage at the premises.   Bru implores this court to disburse the funds which it is holding to Bru because the damages which it claims it sustained as a result of the flood “were the direct result of Plaintiff Orange Palladium, LLC's acts and omissions.”

“The underlying purpose of a § 47a–35b proceeding is to place some obligation on a nonpaying tenant to provide a property owner with surety against further financial losses while the summary process judgment is being considered on appeal.”  Scagnelli v. Donovan, 88 Conn.App. 840, 844, 871 A.2d 1084 (2005).  “[T]he evident purpose of the statute [47a–35b and by analogy 47a–26f] was to authorize the court to settle equitably the many disputes which may arise during the pendency of the proceeding not necessarily related to the merits of the action.”  MFS Associates, Inc. v. Autospa Realty Corp., 19 Conn.App. 32, 35, 560 A.2d 484 (1989).   See also Rock Rimmon Grange # 142 v. Bible Speaks Min., 112 Conn.App. 1, 7, 961 A.2d 1012 (2009).

In the instant case the funds paid to the court by Bru for use and occupancy were paid as such for periods of time prior to June 1, 2012 and in this court's view had accrued to Orange well before the catastrophic flood of August 1, 2012.   Further the alleged events of the August flood occurred over two months after Bat had ceased use and occupancy payments and, most importantly, after the court (Zemetis, J.) had terminated the stay as a result of Bru's default.   In addition there is no credible evidence before this court that the failure of the back flow cap after the unusually heavy rain storm and the resulting flooding of the premises were the “direct result of Orange Palladium, LLC's acts or omissions” or that, considering the scope and nature of this catastrophic event that Orange acted unreasonably in the aftermath.   Bru claims the complete loss of its business at the subject premises because of Orange's acts and omissions.   Bru ultimately lost its business at the subject premises because it failed to comply with an agreement for use and occupancy payments resulting in a judgment of possession in favor of Orange which was affirmed by the Appellate Court.

For the foregoing reasons the plaintiff's motion to disburse funds on deposit is granted and the defendant's corresponding objection is overruled.   The funds on deposit with the court in the amount of $12,800 are ordered paid to the plaintiff.

Michael G. Maronich, Judge

Maronich, Michael G., J.