85-87 Orange Avenue, LLC v. Thomas J. Staley, Executor et al.

2006 Ct. Sup. 22362
No. AAN CV 05 4002445 S.Connecticut Superior Court. Judicial District of Ansonia-Milford at Ansonia.
December 18, 2006.

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]


Defendant seeks summary judgment against the entirety of a four-Count complaint sounding in specific performance, unjust enrichment, quantum meruit and CUTPA. The matter arises from an agreement struck by a putative seller of a commercial site with some soil remediation problems and a potential purchaser willing to undertake the remediation effort.

The resulting arrangement saw the parties frame a written two-year lease with an option to buy.[1] Said arrangement involved, inter alia, an arguably reduced or nominal rent for the two-year term and, per said lease, “as part of the consideration and as additional rent . . ., remediation.”

The option to purchase was granted to tenant (plaintiff) “during the [two-year] lease term.” This phraseology is set forth here near the outset because one central chapter of this argument concerns the timeliness of an attempt by tenant to exercise the option to purchase.

The court entertained hours of oral argument and has come to the difficult, close determination that summary judgment should not lie here. One forced to decide this motion cannot avoid the abiding conviction that in details too numerous and/or nuanced for arguments, briefs, and affidavits, lies the illumination necessary for a confident pronouncement of the reality.

Summary judgment “should be granted only where it is perfectly clear that no issue of fact is involved . . .” See, United Oil Co. v. Urban Redevelopment Commission, 158 Conn. 364, 379 (1969) where our Supreme Court cites Stevens v. Howard D. Johnson Co., 181 F.2d 390 (4th Cir. 1950). “It is also well recognized that summary judgment procedure is particularly inappropriate where the inferences which the parties seek to have drawn deal with questions of motive, intent and subjective feelings and reactions.” United Oil, supra at 376, citing White Motor Co. v. United States, 372 U.S. 253, 259 (1963). Also, in citing CT Page 2236 White, supra, the Connecticut Supreme Court wrote that “summary judgment is to be denied where there exist ‘genuine issues of fact and inferences of mixed law and fact to be drawn from the evidence . . .” United Oil, supra, at 379.

Paragraph 19 of the lease agreement states that, as already partially noted, “as part of the consideration of this lease the tenant agrees to commence within 60 days such remediation as is recommended by an environmental engineering company licensed by the Connecticut State Departmental [sic] of Environmental Protection, . . . including the filing of Form III with the DEP . . .”

Emanating from this single clause is a detail-rich cauldron in which the parties hotly contested in their briefs and oral arguments. Tenant urges that Form III was and is unnecessary and inappropriate in this setting due to the on ground/in ground facts, obviously largely unknown at the threshold of the contract. The opposing contentions would take the court to a place where it ought not and did not travel, being insufficiently informed by either party to permit conclusive determination(s). This is so because apparently the necessity of Form III may be (or is, one cannot be entirely certain) intertwined with whether the site constituted an “establishment,” which leads one into C.G.S. § 22a-134, which in defining “establishment,” would have one possibly descend to assessing, inter alia, whether there were “more than one hundred kilograms of hazardous waste in any one month.” (The definition of hazardous waste, per C.G.S. § 22a-134(4) invites one into either federal or state regulations (the latter not specified) or worse, into the likely quantity of polychlorinated biphenyls.

The statutory scheme was not sufficiently illuminated by the briefs, affidavits or oral argument as to permit resolution as to whether a Form III is or was required. Had this been clearer, a court may have more readily determined the existence of a breached contract by defendant-landlord-seller or a failure to perform by plaintiff. The statute defines a Form III without a direct answer to the question of its necessity in this situation. (C.G.S. § 2a-134(12).)[2] Instead, there is doubt as to said form’s true importance here, where defendant landlord-seller deems its absence a fatal flaw, and, on the other hand, a statutory definition which merely suggests it is to be a written certification that the signer agrees to investigate and remediate, rather than state that he has remediated certain waste issues at the “establishment.” It is possible or even likely that the agreement’s allusion to Form III was the product of an incomplete understanding of its nature and/or necessity at the time the lease agreement was drafted and executed. CT Page 22364

In any event, the scientific experts in the service of each litigant disagree as to whether the site constituted an “establishment,” and the parties disagree as to the necessity of a Form III, with one side branding its absence as noted above, a failure of the condition precedent (to a valid exercise of the option) and the other, who urges it be deemed a totally unnecessary square peg in a round hole futility or a contractual impossibility.

Making these determinations is not rendered any easier by the fact that the paragraph of the lease-option agreement central to these difficulties (paragraph 19) appears to place a goodly measure of good faith trust in an environmental company. (“Tenant agrees to commence . . . such remediation . . . as is recommended by [same] . . .”). Of course, the multiple engineering firms serving different parties are in disagreement, as noted.[3]

Simply put, as to this major prong of the dispute, the sufficiency of remediation, Dante’s Inferno had no more levels of misery.

Next, defendant landlord contends that if one sets aside entirely, and it contends that one can, the above mare’s nest, they are entitled to summary judgment because the option was not timely exercised.

The life span of the lease is, on the face of it, of a two-year duration and paragraph 21 states that “Landlord hereby grants to tenant during the lease term the option to purchase for $90,000.” (The monthly “basic” rental was $320 (paragraph 4) with the cost of remediation, to be borne by tenant deemed “additional rent” as noted. (Paragraph 19.)

No formal exercise of plaintiff’s option (as required by paragraph 21), occurred during the two-year term (although, see, infra, regarding an apparent two-month extension).

Plaintiff urges upon the court that the continuing dispute over performance of the condition precedent (remediation, essentially) created an implied extension, a notion unmet by any swift renunciation of the option by defendant landlord, and, from what appears, no defense effort to oust or evict tenant from its ongoing (albeit probably passive) occupation of the site.

Plaintiff tenant contends that they were strung along (or permitted to wage the environmental dispute) until the prospect arose of a more profitable sale to a third party, riding the coattails of plaintiff tenant’s considerable remediation expenditures. CT Page 22365

The truth is obviously unclear and obviously material.

Slightly undercutting landlord’s position is the permission the lease granted to tenant, whereby landlord agreed tenant buyer “reserves its right to contest in good faith . . . any agency requirement.” (Paragraph 19.) This is not to say that such events were proven, but such right may illuminate for a trier of fact whether the parties had a meeting of the minds that the calendar end of the lease slammed the door. This notion is also slightly buttressed, although even more slightly, by the fact that 22 months[4] might strike a trier of fact as an unnatural or too brief a period to accomplish the levels of remediation (study, diagnosis, work, approval) required.

It may be helpful, in demonstrating the elusive nature of an appropriate level of clarity, to set out a description of the paper events, as revealed in the exhibits.

January 18, 2002: Lease term begins;
March 8, 2002: Recon Engineers issues study to plaintiffs.
October 5, 2003: Recon Engineers Site remediation UST Closure Report.
January 16, 2004: Plaintiff’s attorney writes to landlord, noting that we have agreed that the option period be extended until March 18, 2004, and defendant’s signed acknowledgment appears on the letter.
January 18, 2004: The original option term arguably ends.
March 18, 2004: No paper communication marks this date, but it is the extended option date, per apparent agreement of the parties.
June 24, 2004: Letter to defendant Gaulkin January 16, 2004 from GO Environmental, apparently on behalf of tenant-buyers, noting its conclusion that the site is not an “establishment” as defined by (cited) statutes, and that the site is not subject to the Transfer CT Page 22366 Act; and, that seller will not, upon transfer, “retain any further obligation to investigate or remediate this property.”
September 10, 2004: A New York attorney (Baller) for defendant Gaulkin writes to GO Environmental claiming the property is an “establishment” per other New York attorneys, reporting that a computer check so indicates. Letter concludes that the Recon October 5, 2003 conclusions and recommendations should be followed. This letter concludes that “[f]urthermore, the provisions set forth in the lease option agreement in paragraph 19 should be adhered to by the tenant/prospective buyer.” (Emphasis added).
November 11, 2004: GO Environmental writes to Attorney Kosloff (representing tenants) reporting upon its historical (non-computer) document retrieval, concluding the absence of “hazardous waste manifests,” and enclosing the documents, in certified copy form from DEP.
November 11, 2004: Attorney Kosloff authors letter to Gaulkin’s attorney, Baller. Kosloff cites the documents earlier forwarded by GO Environmental (also on November 11, 2004) purportedly buttressing the GO contention that this site is not an “establishment.”[5]
He adds that, “[t]herefore our client would like to move ahead as soon as possible with the transfer of title.” Additionally, Attorney Kosloff states that if landlord-sellers are in possession of hazardous waste generation evidence, it should be forwarded. “Otherwise, we will expect to hear from you concerning arrangements for a mutually acceptable date for closing.”
January 3, 2005: Attorney Ressler writes defendants, purporting to give “additional notice” that plaintiff exercises its option to purchase, seeking to close on February 3, 2004.

CT Page 22367

January 14, 2005: Attorney Staley, executor of the Barberio Estate, writes to Attorney Ressler, basically advising that plaintiff’s January 3, 2005 communication “is of no effect.”
March 14, 2005: GO Environmental writes to plaintiff’s officials and reviews the dated historical documents purporting to reveal the site is not an “establishment.”
January 12, 2006: Recon Engineers reports to defendant Mrs. Gaulkin with a proposal for environmental engineering services . . .”to obtain site compliance . . .” Nine steps were listed at an approximate cost of $57,000-$63,000 (plus certain other contractor’s work, with the work to require 7-14 months to complete.
January 30, 2006: Accurate Insulation writes letter to Mrs. Gaulkin, estimating $32,000 cost of asbestos removal per a North Star survey of January 13, 2006. February 6, 2006: Accurate Insulation writes again to Mrs. Gaulkin, quoting $24,000. (It is not clear whether this is a lower revised estimate or an additional cost estimate.)

The Baller letter of September 10, 2004, is one of the puzzling indications consistent with the possibility that the parties impliedly extended the contract. Also consistent with this possibility is the fact that the dispute manifest in the communication as to the nature of the property and the progress (or completion) of the remediation raged on, seeing plaintiff’s counsel purporting to exercise plaintiff’s option after (at least) three communications between the litigants and/or their agents which may or may not lead one to conclude the existence of another extension(s), to be implied or real.

One can only speculate as to what unwritten conduct may explain the inertia that occasionally seemed to grip the parties. Did plaintiffs give up? Were other matters more pressing for each side? Did each conclude they needed to litigate? Did they strive to amend or create new contract provisions? These sorts of questions are not answered in the dueling affidavits and/or in the dueling correspondence and reports of scientists. More evidence seems necessary, but it is this sort of need that helps distinguish summary judgments granted from those best denied to await trial. CT Page 22368

There is sufficient doubt in the rather skeletal history provided to justify denial of summary judgment.

One must always take care that a party who “prevails” via a summary judgment denial does not proceed with the anticipation of trial victory. It is not difficult to imagine in the missing facts abundant seeds of defeat for plaintiff. But, summary judgment must be denied.[6]

If both sets of litigants desire to accomplish their original goals, pre-trial time might well be spent in some sort of mediation/arbitration effort leading each party to security or peace of mind post-sale. The court did not learn, with certainty, from the parties whether hold harmless promises can be effective for sellers in remediation contexts. It is not the court’s obligation, of course, to answer what may be a difficult question.

Should the parties wish to iron out some of their issues the undersigned court would strive to make time to assist (in what is now an out-of-district matter for Stamford).

[1] The defendant landlords were apparently two individuals, Mrs. Roseanne Gaulkin and New Haven Attorney Francis Barberio who has since passed away, and as a result, executor Thomas Staley represents his estate’s interest and is thus a nominal party co-defendant. The property has a building upon it, now unoccupied, which in the past, until approximately a decade ago, served as a Mack truck sales and repair operation.
[2] “`Form III’ means a written certification signed by a certifying party on a form prescribed and provided by the commissioner, which certification states that (A) a discharge, spillage, uncontrolled loss, see page or filtration of hazardous waste or a hazardous substance has occurred at the establishment or the environmental conditions at the establishment are unknown, and (B) that the person signing the certification agrees to investigate the parcel in accordance with prevailing standards and guidelines and to remediate pollution caused by any release of a hazardous waste or hazardous substance from the establishment in accordance with the remediation standards.” (Emphasis added.)
[3] Salt in these wounds was sprinkled at oral argument by the landlord’s allegation that the environmental engineering company primarily utilized by tenant is not, after all, licensed by the state. (No evidentiary illumination was proffered by either side.)

CT Page 22369

[4] The 24-month lease allowed 60 days for the commencement of tenants’ undertaking of remediation. Note too, as the text states, an extension apparently occurred. (See reference to a letter of January 16, 2004.)
[5] Kosloff also noted that,” . . . [i]n the wake of your letter (the letter of Gaulkin’s attorney, Baller) I directed Ms. Osrrowski (president of GO Environmental, a firm consulting plaintiff) to redouble her efforts to ascertain whether Mack Truck . . . had, in fact, generated hazardous waste . . . in sufficient amounts so as to cause the property to meet the definition of an ‘establishment’ under the Connecticut Transfer Act.”
[6] The court feels constrained to set forth a bit of commentary intended to be helpful. A trial of the matter may further lead to a time-consuming appeal by either side. It appears that the landlords-sellers wanted to dispose of the property for little money but with the additional, if not primary hope of simply emerging free of potential environmental liability. Such worries might affect sellers’ peace of mind even if they were court cleared to sell to another. The potential for disputes akin to those between these litigants might exist again with a new buyer. It is probably fair to say that neither side was initially equipped with adequate knowledge (or funds to obtain it) and, in understandable uncertainty, fashioned an unclear process. They may have been wrong about what was needed to be secure from environmental liability and wrong about how much time and/or money would be required. (One’s overall sense of the transaction suggests the likelihood of litigants new to the transfer of realty with remediation issues.)

CT Page 22370