1850 Silas Deane Associates, LLC v. Santo DiMascio aka Santi DiMascio et al.

2007 Ct. Sup. 4948
No. CVH-7457Connecticut Superior Court Judicial District of Hartford, Housing Session at Hartford
April 10, 2007.

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

MEMORANDUM OF DECISION ACTION IN DAMAGES
JAMES M. BENTIVEGNA, JUDGE.

I STATEMENT OF THE CASE
This is a civil action in damages. The plaintiff, hereinafter (“landlord”), alleges breach of lease agreement and breach of lease guaranty agreement.

In their answer, the defendants, hereinafter (“tenant”), admit the allegations of the complaint but raise failure to mitigate as a special defense. By counterclaim, the tenant alleges conversion. The matter was tried on March 28, 2007.

II FINDINGS OF FACT
The following facts were admitted and/or proved at trial by a fair preponderance of the evidence.[1]

The landlord is the owner of the subject property at 1834 Silas Deane Highway, Rocky Hill, Connecticut, where the tenant operated a beauty salon. On July 2, 2004, the parties entered into a written lease agreement. The tenant had previously occupied a portion of the property and had posted a $725.00 security deposit. The lease term ran from December 31, 2004 to December 31, 2016. The monthly rent was $3,200.00 through November 30, 2005, and increased annually on December 1st by 2.75%. On December 1, 2005, the rent increased by 2.75% to $3,288.00 per month. Payments received after the fifteenth of each month incurred a late fee of $50.00. The lease agreement did not contain any provision for attorneys fees in case of default. The defendant, Santo DiMascio a/k/a Santi DiMascio, also signed a lease guaranty agreement. CT Page 4949

The tenant occupied the property pursuant to the lease agreement. The tenant started missing rent payments and accumulated a rent balance of $7,716.64 as of December 31, 2005. After the tenant failed to pay rent for the month of March 2006, the landlord served the tenant with a notice to quit possession on March 29, 2006.

In early April 2006, the tenant paid the landlord $13,500.00 toward sums past due for months prior to March 2006, and for a portion of March 2006. On or about May 1, 2006, the tenant tendered an additional payment in the amount of $1,400.00, but the check was returned for insufficient funds. The tenant failed to make any subsequent payments. The unpaid rent/use and occupancy arrearage was $25,849.64.

On May 24, 2006, the landlord served the tenant with a summary process action based on nonpayment of rent. See Docket Number HDSP-137676. A default judgment was entered against the tenant on June 19, 2006. On June 27, 2006, an execution was issued.

On or about June 18, 2006, Elizabeth Pensiero, DiMascio’s now ex-wife, came to the property with a rental truck to secure the tenant’s possessions. The tenant was still in possession of the premises. The evidence demonstrated that the televisions had already been removed by the time she arrived. The landlord denied removing the televisions. Pensiero removed numerous items from the property including furniture, work stations, beauty products, furnishings, light fixtures, sinks, mirrors, and other equipment. Some of the items taken, mirrors, sinks and light fixtures, did not belong to the tenant and were later returned to the landlord. Pensiero testified that she had an electrician re-install light fixtures, and someone made a few repairs. There were two tanning machines, one newer than the other. Both machines were in a used condition. Pensiero removed only one of the tanning machines. She moved the tenant’s possessions to her garage at her home in West Hartford. DiMascio is reportedly living in Sicily.

In June 2006, after the tenant vacated, the landlord engaged his real estate agent to relet the property. The agent had an exclusive leasing agreement with the landlord. His fee was 6% of the aggregate gross annual rent. Soon after the tenant vacated, the agent started marketing the property by posting a sign on the property, listing the property on commercial listing services, and scheduling showings. There were several prospective tenants. The agent started negotiating with the eventual new tenant. Another agency was also involved. The parties negotiated the lease terms. The landlord had to verify the new tenant’s financial CT Page 4950 information. The deal came together in a couple of weeks, and the new tenant started moving into the property during October 2006-November 2006. The tenant was given a substantial discount for the two months. Based on the broker’s leasing agreement, the fee was $15,127.00.

The new tenant wanted the remaining tanning machine removed. The landlord had to disassemble the machine and move it to his warehouse, where it is presently stored. The landlord has tried unsuccessfully to return the tanning machine to the tenant or a family member.

The evidence indicated that the tenant made some leasehold improvements to the property. However, there was a lack of evidence regarding the nature and value of the improvements.

During the trial, the landlord offered evidence as to damages to the property. The costs of the damages amounted to $2,150.00.

The landlord requested an award of $43,126.64, for the unpaid rent/use and occupancy, damages to the property, and costs of finding a replacement tenant.

As a special defense, the tenant offered evidence that the landlord failed to make sufficient efforts to mitigate the damages by not finding a replacement tenant sooner. According to the tenant, there was another prospective tenant who would have moved in sooner.

As to the lease guaranty agreement, Santi DiMascio agreed to “unconditionally guaranty” to the landlord, “the payment by the Tenant of all rent and additional rent to be paid by the Tenant under the terms of the Lease, and the full, prompt and faithful performance of each and every term, covenant, condition and agreement to be paid, performed and observed by the Tenant under the Lease.” Despite demand by the landlord, DiMascio has failed and refused to tender payment to the landlord of the amounts due and owing under the lease as required by the lease guaranty agreement.

III DISCUSSION A Breach of Lease Agreement
The essential elements for a cause of action based on breach of CT Page 4951 contract are (1) agreement formation, (2) performance by one party, (3) breach of the agreement by the other party, (4) direct and proximate cause, and (5) damages. McCann Real Equities Series XXII, LLC v. David McDermott Chevrolet, Inc., 93 Conn.App. 486, 503-04, 890 A.2d 140, cert. denied, 277 Conn. 928, 895 A.2d 7 (2006). “[A] breach of contract claim . . . requires proof by a preponderance of the evidence.” Foley v. Huntington Co., 42 Conn.App. 712, 732 n. 7, 682 A.2d 1026, cert. denied, 239 Conn. 931, 683 A.2d 397 (1996).

“When the lessee breaches a lease for commercial property, the lessor has two options: (1) to terminate the tenancy; or (2) to refuse to accept the surrender. Where the landlord elects to continue the tenancy, he may sue to recover the rent due under the terms of the lease. Under this course of action, the landlord is under no duty to mitigate damages . . . When the landlord elects to terminate the tenancy, however, the action is one for breach of contract; . . . and, when the tenancy is terminated, the landlord is obliged to mitigate his damages . . . When the tenancy ends, the tenant is released from his obligations under the lease and is, therefore, no longer obliged to pay rent . . .

“Although the termination of the tenancy releases a tenant from his obligations under the lease, such release does not leave the landlord without legal recourse to recover damages. Where a landlord, as in this case, elects to terminate the tenancy and to regain possession of the premises, although he cannot institute an action for rent due under the lease, he may sue for a breach of the lease. Where the action is one for breach of the lease, basic contract principles apply . . .

“A lease is nothing more than a contract . . . Thus, as in any other contract action the measure of damages is that the award should place the injured party in the same position as he would have been in had the contract been fully performed . . . As a consequence, the unpaid rent, while not recoverable as such, may be used by the court in computing the losses suffered by the plaintiff by reason of the defendant’s breach of contract of lease. The plaintiff would be entitled to recover the damages which would naturally follow from such a breach . . . in an action for breach of a lease, the amount of rent agreed to by the parties is a proper measure of damages.” (Citations omitted; internal quotation marks omitted.) Rokalor v. Connecticut Eating Enterprises, 18 Conn.App. 384, 388-90, 558 A.2d 265 (1989).

B Breach of Lease Guaranty Agreement
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“A guaranty is a collateral undertaking to pay a debt or perform a duty, in case of the failure of another person, who is in the first instance liable to such payment or performance . . .” (Citations omitted; internal quotation marks omitted.) Bronx Derrick Tool Co. v. Porcupine Co., 117 Conn. 314, 318, 167 A. 829 (1933).

A claim of breach of lease guaranty agreement would logically consist of the same elements: 1) agreement formation, (2) performance by one party, (3) breach of the agreement by the other party, (4) direct and proximate cause, and (5) damages. Proof by a preponderance of the evidence would also be required.

C Mitigation
The tenant alleges failure to mitigate damages as a special defense. “[A] special defense is not an independent action; rather, it is an attempt to “plead facts that are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action.” Valentine v. LaBow, 95 Conn.App. 436, 447 n. 10, 897 A.2d 624, cert. denied, 280 Conn. 933, 909 A.2d 963 (2006).

General Statutes § 47a-11c provides: “Breach of rental agreement by tenant. Measure of damages. If a landlord terminates a residential o commercial tenancy on the grounds that the tenant committed a breach of the rental agreement and the landlord brings an action for damages for the breach, such damages shall include the amount of rent agreed to by the parties but unpaid by the tenant. The landlord shall be obligated to mitigate damages. This section shall not limit either party’s rights to assert other legal or equitable claims, counterclaims, defenses or set-offs.” (Emphasis added.)

In breach of contract actions, “[t]he plaintiff clearly ha[s] a duty to exercise reasonable conduct to minimize the damages occasioned by the defendant’s breach . . . and the court will measure damages as though [the plaintiff] had acted reasonably . . . The logical corollary of this rule is that the plaintiff was entitled to recover the cost of its reasonable efforts to mitigate the damages occasioned by the breach . . . The injured party is not precluded from recovery . . . to the extent that he has made reasonable but unsuccessful efforts to avoid loss.” (Citations omitted; internal quotation marks omitted.) West Haven Sound Development Corp. v. West Haven, 201 Conn. 305, 332, 514 A.2d 734
(1986).

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“Although . . . failure to mitigate damages is not one of the enumerated defenses listed in [Practice Book] § 10-50, Superior Court cases have approved the use of a special defense to plead this claim . . . Moreover, by allowing the failure to mitigate damages to be pled as a special defense, it is clear that the defendant bears the burden of proof on this issue.” (Citations omitted.) Profitec, Inc. v. FKI Industries, Inc., Superior Court, judicial district of New Haven, Docket No. CV 99 0427490S (November 24, 2000, Devlin, J.) (28 Conn. L. Rptr. 619, 620). “The defendant bears the burden of proving that the plaintiff failed to exercise reasonable care to mitigate damages.” Id. “In a breach of contract action, the defendant bears the burden of proving that the plaintiff failed to exercise reasonable care to mitigate damages.” (Citations omitted). Lynch v. Granby Holdings, Inc., 37 Conn.App. 846, 850, 658 A.2d 592 (1995).

“It is well established that in an action for damages for breach of a lease, the injured party is under a duty to mitigate his or her damages . . . The duty to mitigate requires a landlord to `make reasonable efforts’ to minimize damages; id.; which includes taking steps to relet the premises. What constitutes reasonable efforts is a question of fact for the trier . . .” (Citations omitted). Rokalor v. Connecticut Eating Enterprises, supra, 18 Conn.App. 390. “In determining that the plaintiff failed to mitigate some of its claimed damages, the trial court found the following facts or omissions determinative. First, the trial court found that the plaintiff did not hire a real estate broker until almost four months after the defendant’s default and provided no explanation for this delay. The trial court found that this unexplained delay was unreasonable. In addition, the plaintiff did not introduce any evidence by the broker to establish what efforts were made by him to lease the premises. Further, the trial court found that the unexplained decrease in the rental value of the property was unreasonable in view of the fact that there was evidence presented that established that the value of the property had increased. We conclude, on the basis of these factors that the trial court’s finding that the plaintiff failed to make reasonable efforts to mitigate its damages was well within its discretion.”Id. at 390-91.

In Thorne v. Broccoli, 39 Conn.Sup. 289, 292-93, 478 A.2d 271
(1984), the court considered the following factors in evaluating mitigation efforts in a residential setting: the money spent on advertising the rental, the number of newspaper advertisements, the posting of signs, the involvement of a real estate firm, the number of showings of the premises to prospective tenants, the offering of the premises at a reduced rate, and the length of time before a new tenant was found. These factors would likewise be helpful in determining the CT Page 4954 reasonableness of mitigation efforts in a commercial setting.

D Counterclaim — Conversion
The tenant alleges conversion by the landlord of the tenant’s possessions and leasehold improvements as a counterclaim.

Practice Book § 10-10 provides in relevant part: “In any action for legal or equitable relief, any defendant may file counterclaims against any plaintiff . . . provided that each such counterclaim and cross claim arises out of the transaction or one of the transactions which is the subject of the plaintiff’s complaint . . .” Unlike a special defense, “a counterclaim . . . is . . . an independent action . . .” (Internal quotation marks omitted.) Valentine v. LaBow, supra, 95 Conn.App. 447
n. 10. “The term [counterclaim] itself is a general and comprehensive one, naturally including within its meaning all manner of permissible counter-demands . . . [T]he word counterclaim was intended to be the generic term for all cross demands other than setoffs, whether in law or in equity.” (Citation omitted; internal quotation marks omitted.)Gattoni v. Zaccaro, 52 Conn.App. 274, 280, 727 A.2d 706 (1999).

The tenant in this case seeks to assert as a counterclaim common-law conversion. There is no cause of action in Connecticut for misappropriation of personal property. See generally R. Newman J. Wildstein, Tort Remedies in Connecticut (1996) §§ 14-2 to 14-2(c), pp. 192-95.

A conversion claim may be asserted by way of counterclaim. See, e.g. Galik v. Mallinson, Superior Court, judicial district of New Haven, Docket No. CVNH 9904 9366 (March 28, 2002, Leavitt, J.). “The tort of [c]onversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner’s rights . . . Thus, [c]onversion is some unauthorized act which deprives another of his property permanently or for an indefinite time; some unauthorized assumption and exercise of the powers of the owner to his harm. The essence of the wrong is that the property rights of the plaintiff have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm . . . The term owner is one of general application and includes one having an interest other than the full legal and beneficial title . . . The word owner is one of flexible meaning, and it varies from an absolute proprietary interest to a mere possessory right . . . It is not a technical term and, thus, is not confined to a person who has the absolute right in a CT Page 4955 chattel, but also applies to a person who has possession and control thereof.” (Citation omitted; internal quotation marks omitted.)Deming v. Nationwide Mutual Ins. Co., 279 Conn. 745, 770-71, 905 A.2d 623
(2006).

“Statutory theft under [General Statutes] § 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 that he or she must demonstrate to prove conversion . . .” (Citations omitted; internal quotation marks omitted.) Id., 771.

E Set-off
At trial, the tenant argued for a set-off, even though it was not expressly pled. For the sake of completeness, the court will address the tenant’s request for a set-off.

“A right of setoff may . . . be asserted in response to a complaint just as a counterclaim may be so pleaded. Practice Book § 10-54.” Gattoni v. Zaccaro, 52 Conn.App. 280, fn4. “As to setoff, . . . [i]t is available only when the plaintiff sues for recovery of a debt.” Stephenson, Connecticut Civil Procedure, Volume 1, p. 258 (3rd Ed. 1997). “The law of setoff is governed by General Statutes 52-139. The relevant portion of that statute provides: (a) In any action brought for the recovery of a debt, if there are mutual debts between the plaintiff or plaintiffs, or any of them, and the defendant or defendants, or any of them, one debt may be set off against the other.” (Internal quotation marks omitted.) Petti v. Balance Rock Associates, 12 Conn.App. 353, 362, 530 A.2d 1083 (1987).

F Analysis
In the present case, the tenant admits all the allegations of the CT Page 4956 complaint regarding the breach of lease and guaranty agreement.

The preponderance of the evidence demonstrated that the tenant failed to make rent payments under the lease agreement. The landlord then acted to terminate the tenancy and regain possession of the subject property. On March 29, 2006, the plaintiff served the defendants with a notice to quit possession. The tenant last made a payment, in good funds, on April 11, 2006. An eviction action was served on May 24, 2006. On June 18, 2006, the tenant vacated the property and the landlord took possession the next day. For the period in question, the rent/use and occupancy arrearage was $25,849.64. In addition, DiMascio did not make payment to the landlord of the amounts due and owing under the lease agreement as required by the lease guaranty agreement. Under these circumstances, the landlord is entitled to damages for the tenant’s breach.

The landlord made efforts to mitigate damages resulting from the tenant’s breach. The landlord did not delay in having his real estate broker market the property. Within weeks, the broker posted a sign, listed the property on commercial listing services, arranged showings, and identified a prospective tenant. The tenant’s claim that another party could have moved in sooner was not consistent with the facts. The landlord and the new tenant spent several weeks negotiating a lease agreement. The new tenant moved into the property in mid-fall 2006. The landlord made reasonable efforts to mitigate the damages. The broker’s fee was $15,127.00. Considering the lease term ended on December 31, 2016, the broker’s fee was equivalent to approximately five months of rent. The fee was reasonable. Accordingly, the tenant’s special defense of failure to mitigate must fail.

After the tenant vacated the property, the evidence showed that there were damages to the property. The tenant was responsible for the damages. The evidence supports a damage award of $2,150.00.

As to the counterclaim, the preponderance of the evidence supports the following. While the tenant alleges that he lost some possessions, the evidence demonstrated that Pensiero removed almost all of the tenant’s possessions before the landlord regained possession of the property. The one item left on the property, the tanning machine, was in effect abandoned by the tenant. Although there was evidence as to the costs of the tenant’s possession for tax purposes, there was insufficient evidence regarding the nature and value of any missing possessions. The landlord did not deprive the tenant of his possessions.

The tenant apparently made some leasehold improvements, but the nature and value of any improvements were not proved by a preponderance of the CT Page 4957 evidence.

The preponderance of the evidence showed that the tenant was not harmed by the landlord’s conduct. The evidence did not support the counterclaim or a set-off.

IV CONCLUSION AND ORDER
Based on the evidence presented, the court makes the following findings. The landlord has proved, by a fair preponderance of the evidence, all the elements of the case. The tenant has not proved, by a fair preponderance of the evidence, the special defense or counterclaim. Under these circumstances, a set-off is not justified.

Therefore, judgment is entered for plaintiff-landlord on all claims. The plaintiff is awarded damages in the amount of $43,126.64.

[1] “The admission of the truth of an allegation in a pleading is a judicial admission conclusive on the pleader. Jones Destruction, Inc. v. Upjohn, 161 Conn. 191, 199, 286 A.2d 308 (1971).” Rodearmel v. Rodearmel, 173 Conn. 273, 275, 377 A.2d 260, 262 (1977); “An admission in pleading dispenses with proof, and is equivalent to proof.” (Citation omitted.) Patchen v. Delohery Hat Co., 82 Conn. 592, 594, 74 A. 881 (1909).

“The [fact-finding] function is vested in the trial court with its unique opportunity to view the evidence presented in a totality of circumstances, i.e., including its observations of the demeanor and conduct of the witnesses and parties.” (Internal quotation marks omitted.) Cavoli v. DeSimone, 88 Conn.App. 638, 646, 870 A.2d 1147, cert. denied, 274 Conn. 906, 876 A.2d 1198 (2005).

“It is well established that in cases tried before courts, trial judges are the sole arbiters of the credibility of witnesses and it is they who determine the weight to be given specific testimony . . . It is the quintessential function of the fact finder to reject or accept certain evidence . . .” (Citations omitted; internal quotation marks omitted.)” In re Antonio M., 56 Conn.App. 534, 540, 744 A.2d 915 (2000). “The sifting and weighing of evidence is peculiarly the function of the trier [of fact].” Smith v. Smith, 183 Conn. 121, 123, 438 A.2d 842 (1981). “[N]othing in our law is more elementary than that the trier [of fact] is the final judge of the credibility of witnesses and of the weight to be accorded to their testimony.” (Citation omitted; internal CT Page 4958 quotation marks omitted.) Toffolon v. Avon, 173 Conn. 525, 530, 378 A.2d 580 (1977). “The trier is free to accept or reject, in whole or in part, the testimony offered by either party.” Smith v. Smith, supra, 183 Conn. 123. “That determination of credibility is a function of the trial court.” Heritage Square, LLC v. Eoanou, 61 Conn.App. 329, 333, 763 A.2d 199 (2001).

“[T]he trier is free to juxtapose conflicting versions of events and determine which is more credible . . . It is the trier’s exclusive province to weigh the conflicting evidence and determine the credibility of witnesses . . . The trier of fact may accept or reject the testimony of any witness . . . The trier can, as well, decide what — all, none, or some — of a witness’ testimony to accept or reject.” (Citations omitted; internal quotation marks omitted.) State v. Osborn, 41 Conn.App. 287, 291, 676 A.2d 399 (1996).

The trial court’s function as the fact finder “is to draw whatever inferences from the evidence or facts established by the evidence it deems to be reasonable and logical.” (Citation omitted; internal quotation marks omitted.) In re Christine F., 6 Conn.App. 360, 366, 505 A.2d 734, cert. denied, 199 Conn. 808, 508 A.2d 769 (1986).

“While a plaintiff is entitled to every favorable inference that may be legitimately drawn from the evidence, and has the same right to submit a weak case as a strong one, the plaintiff must still sustain the burden of proof on the contested issues in the complaint and the defendant need not present any evidence to contradict it. Lukas v. New Haven, 184 Conn. 205, 211, 439 A.2d 949 (1981). The general burden of proof in civil actions is on the plaintiff, who must prove all the essential allegations of the complaint. Id.” Gulycz v. Stop Shop Cos., 29 Conn.App. 519, 523, 615 A.2d 1087 (1992).

The standard of proof in summary process actions, a fair preponderance of the evidence, is “properly defined as the better evidence, the evidence having the greater weight, the more convincing force in your mind.” (Internal quotation marks omitted.) Cross v. Huttenlocher, 185 Conn. 390, 394, 440 A.2d 952 (1981).

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