446 MAIN ST., LLC v. ROBERT LEBEL.

2008 Ct. Sup. 15072
No. NBSP-049972Connecticut Superior Court Judicial District of New Britain, Housing Session at New Britain
June 20, 2008

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

MEMORANDUM OF DECISION
PETER EMMETT WIESE, JUDGE.

I PROCEDURAL HISTORY
This is a summary process action commenced by notice to quit and writ, summons and complaint. In the March 6, 2008 complaint, the plaintiff, 446 Main Street, LLC, alleges that it rented approximately 2400 square feet of commercial space to Rahual Desai and J.R. Desai, LLC (Desai). Thereafter, Desai, acting absent the required written consent of the plaintiff, sublet approximately 560 square feet of the premises to the defendant, Robert Lebel. The plaintiff contends that Lebel never had a lawful right or privilege to occupy the premises.

The defendant responded to the complaint with an answer and special defenses. In the special defenses, the defendant asserts that written permission to sublet the premises is being unreasonably withheld.[1]
The defendant contends that verbal permission had been given.

On April 25, 2008, a trial was conducted. The parties appeared with legal counsel and presented sworn testimony and a number of exhibits. Thereafter, post-trial memoranda were filed with the court.

II DISCUSSION
The plaintiff (Main St.) is the owner of a commercial building located at 446 Main Street, Plymouth, Connecticut. The principals of Main St. are Carolyn and Charles Kapros. Main St. operates a business at the premises known as the Hilltop Restaurant (Hilltop). The menu generally consists of Italian dishes. Patrons may dine on the premises or enjoy take out. Hilltop is open on Tuesday through Saturday, 11 a.m. to 9 p.m.

CT Page 15073 In addition to Hilltop, the premises also contain a commercial rental unit consisting of approximately 2400 square feet of space. By agreement dated July 20, 2001, Main St. leased this portion of the premises to Atmiyata, LLC. (Plaintiff’s Ex. 2.) The exclusive use of the premises was specified as a “grocery/convenience store as the term is defined by custom and use in the area it is situated.” (Plaintiff’s Ex. 2, para. 2.) The term of the lease agreement was designated as fifteen years commencing on August 1, 2001.

Atmiyata, LLC operated a business known as Pete’s Deli and Grocery from that location (Pete’s). The business included a take-out delicatessen. A delicatessen is by custom and use generally a part of a convenience store in the area where Pete’s is located.

In October 2002, Main St. consented to the assignment of the lease by Atmiyata, LLC to Desai. Desai also entered into a purchase and sale agreement with Atmiyata, LLC for the equipment, trade name and inventory for Pete’s. Desai took possession of the premises and began operation of a convenience store and delicatessen. (Defendant’s Ex. A.) The Kaproses and Desai are sophisticated entrepreneurs.

In a letter dated November 7, 2002, Desai’s attorney, Thomas P. Tabellione, wrote to Main St.’s attorney, James D. Donovan, requesting that Main St. consent to a plan to sublet a portion of the premises currently used as the delicatessen. (Defendant’s Ex. A.) The lease agreement in question provides in relevant part: “[t]he Tenant shall not have the power to . . . sublet . . . the Demised Premises without first procuring the written consent of the landlord which consent shall not be unreasonably withheld.” (Plaintiff’s Ex. 2, para. 7.)

In December 2007, the personal relationships between Desai and the Kaproses had deteriorated. There were disputes concerning monies claimed due by Hilltop for snow plowing and water bills. Other issues included customer parking and alleged delinquent rental payments. On December 8, 2007, a meeting was held in Attorney Donovan’s office. The attorneys believed that it would be useful to bring the parties together to have a global discussion of all outstanding issues. Unfortunately, however, it was unproductive because the clients were extremely contentious. There exists a great amount of animosity between the Kaproses and Desai.

Attorney Donovan excused himself from the meeting for approximately fifteen minutes in order to obtain documents. The issue of subletting the premises was raised at that time. Attorney Tabellione and Desai left the meeting believing that they had received verbal authority to sublet the premises in exchange for a $5,000 payment to Main St., which would CT Page 15074 purportedly cover the outstanding bills. However, there was no meeting of the minds on this issue. Initially, Desai paid Main St. $3,000. Thereafter, on January 30, 2008, Attorney Tabellione wrote a letter to Attorney Donovan. Enclosed was a check in the amount of $2000, with the instruction that it be held in escrow until the written consent to sublet was received. (Plaintiff’s Ex. 4.) Attorney Donovan, acting at the direction of his client, returned the check and informed Attorney Tabellione that written consent would not be forthcoming.

Prior to the receipt of the aforementioned notification, Desai, acting upon his belief that he had verbal consent, entered into a written sublease agreement with Lebel on January 28, 2008. The lease sublet a portion of the premises to be used as a delicatessen. The base rent was set at $800 per month. The subtenant was also responsible for the cost of 44% of the monthly water bill attributed to the entire building. (Plaintiff’s Ex. 5.)[2]

The defendant Lebel has invested approximately $60,000 in order to upgrade Pete’s. Lebel began operations and offered only take out food and catering services. Pete’s does not sell pizza or many of the other foods that are offered on the menu at Hilltop. Hilltop offers full meals with sit down, take out and catering services. Pete’s is open for business seven days per week from 6 a.m. to 9 p.m. Accordingly, Pete’s is open approximately twice as many hours per week as Hilltop. A delicatessen has been in operation within Pete’s for a number of years prior to the sublease to Lebel. A delicatessen is a common component of a grocery/convenience store in the geographic area in question. Hilltop has not economically suffered from Lebel’s operation of the delicatessen, nor has water usage increased. Lebel presents himself as a responsible businessman.

The defendant has raised the special defense that written permission to sublet the premises is being unreasonably withheld. “[A] landlord who contractually retains the discretion to withhold its consent to the assignment of a tenant’s [commercial] lease must exercise that discretion in a manner consistent with good faith and fair dealing.” Warner v. Konover, 210 Conn. 150, 154-55, 553 A.2d 1138 (1989). “If . . . the terms of the lease . . . provide that the lessor’s consent to an assignment will not be unreasonably withheld, the lessor may not arbitrarily refuse his consent where the proposed assignee is an unobjectionable and responsible person.” (Emphasis added.) Robinson v. Weitz, 171 Conn. 545, 550, 370 A.2d 1066 (1976).

Main St. contends that it may withhold consent for several reasons. First, Main St. maintains that the delicatessen is not a permitted use CT Page 15075 under the lease agreement. (Plaintiff’s Ex. 2, para. 2.) In this regard, the court finds that the evidence demonstrates that it is a permitted use. Pete’s, with the knowledge of Main St., operated a delicatessen for a number of years prior to the commencement of Lebel’s business operation. Moreover, it is common to have a delicatessen in a grocery/convenience store in the Plymouth area.

Second, Main St. argues that Lebel’s business operations will increase the overall water consumption at the property resulting in a detrimental financial impact because it pays 56% of the water bill. This argument fails because it is not supported by the evidence.

Third, Main St. argues that it is acting in its own economic interests because Lebel’s competition causes a negative financial impact. The credible evidence does not support this conclusion. The two business operations are substantially dissimilar and generally do not compete with one another. Main St. has not proven that it has suffered any negative financial impact from Lebel’s delicatessen.

The court finds that Main St.’s motivation for withholding written consent is the animosity that exists between the Kaproes and Desai. This is not consistent with contractual principles of good faith and fair dealing between sophisticated business persons. Main St. unreasonably withheld its written consent to sublet a portion of the premises to Lebel. Accordingly, the defendant has prevailed in his special defense and judgment shall enter in his favor.

III CONCLUSION
Judgment shall enter in favor of the defendant.

[1] The defendant also asserts the special defense of promissory estoppel, which the court finds is not supported by the evidence.
[2] The water bill payment mirrored the obligation as set forth in the master lease agreement (Plaintiff’s Ex. 2). Pete’s passed this expense on to Lebel.

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