2004 Ct. Sup. 9246
No. CV18-9465Connecticut Superior Court, Judicial District of Litchfield Geographic Area 18 at Bantam
June 15, 2004
MEMORANDUM OF DECISION
PICKARD, JUDGE.
This is an action for summary process involving commercial property used for a restaurant. For the reasons given below, judgment must enter against the plaintiff, Xiao Yan Zheng, and in favor of the defendants, Jie Zheng d/b/a Wasabi Restaurant and Chin Yong Cheng d/b/a Wasabi Restaurant.
In October 2001 the property at 24 South Main Street in Kent, Connecticut (“the premises”) was owned by Stuhrcke Lekaj LLC (“Stuhrcke”). This property is a multi-level commercial building. On October 5, 2001 Stuhrcke executed a written lease (“the lease”) with Guo Guang Chen for approximately 2675 square feet of space located on the main level of the premises. The lease provides that the only permitted use of the premises will be for the operation of a restaurant. The term of the lease was to be two years and the rent was to be $2,000 per month. The lease prohibits assignment of the lease by Guo Guang Chen without the prior written consent of Stuhrcke. But, Stuhrcke agreed not to withhold or delay Guo Guang Chen’s request of an assignment. The lease provides an option to extend the lease for an additional term of two years at $2,100 per month for the first year and $2,200 per month for the second year. This extension must be exercised by Guo Guang Chen giving six months written notice.
As sometimes happens, the reality of the situation did not match the documentation. Following the execution of the lease, possession of the premises was taken by a restaurant owned and operated by a corporation known as Wasabi Japanese Restaurant, Corp. (“the corporation”). The plaintiff, Xiao Yan Zheng, and Guo Guang Chen were equal owners of all the stock in the corporation. The plaintiff was the president of the corporation, and Chen was the secretary. CT Page 9247
The corporation operated a Japanese restaurant known as Wasabi at the premises and paid the rent to Stuhrcke. On January 24, 2002 the plaintiff, Xiao Yan Zheng, sold his stock in the corporation to the defendant, Jie Zheng and Guo Guang Chen. On the same day, the defendant, Jie Zheng, signed a written guarantee of the lease. This guarantee was also signed by Stuhrcke. The corporation continued to operate the restaurant and to pay the rent to Stuhrcke.
On May 2, 2002 Guo Guang Chen sold his stock in the corporation to another person named So Chan and the defendant, Yong Chun Chen. The agreement of sale also provides that Guo Guang Chen assigns to the defendants, Jie Zheng and Yong Chun Cheng, and to So Chen, the lease together with the authorization “. . . to extend and to execute on behalf of Seller for lease extension, modification, assignment and surrender.” The corporation continued to operate the restaurant and to pay the rent to Stuhrcke.
On November 13, 2002 Stuhrcke sold the premises to the plaintiff and assigned to him the lease. The corporation continued to operate the restaurant and, thereafter, paid the rent to the plaintiff.
By letter dated March 28, 2003, a letter was sent to the plaintiff’s agent stating that it was to serve as notice of an intent to renew the lease for another two years at the expiation of the current term. This letter was on stationery of “Wasabi Japanese Cuisine 24 South Main Street, Kent, Ct 06757.” The letter had the names, Mr. Guo Guan Chen and Mr. Chun Yong Chen typed at the bottom but was unsigned. The plaintiff’s agent, Kam-Ross Properties, Inc., wrote back on April 1, 2003 to say that the letter could not be accepted because it was not signed.
On April 9, 2003 another letter was sent on Wasabi stationery to Kam-Ross again stating that it was notice of an intent to renew the lease. This letter has the names Jie Zheng and Mr. Guo Guan Chen typed at the bottom and was signed by the defendant, Jie Zheng. Another letter from Kam-Ross dated April 17, 2003 was sent to the defendant, Jie Zheng, at 24 South Main St, Kent, Ct which states: “We received your letter dated 4/9/03 regarding extension of the lease at 24 South main Street, Kent, Ct. We are confused as we received a similar letter dated 3/28/03 from Mr. Guo Guan Chen and Mr. Chun Yong Chen. I would like to know why there are 3 people asking for renewal of the lease. Please let me CT Page 9248 know who are the actual owners of Wasabi Japanese Cuisine. Thank you for your prompt attention to this matter.” This is an odd letter because it had to have been clear to the plaintiff, as a stockholder in the corporation at the time of the lease, that the owner of Wasabi Japanese Cuisine was, and still is the corporation. Furthermore, the plaintiff had been receiving monthly rent checks since he purchased the property which were drawn on an account of “Wasabi Japanese Restaurant, Corp 24 So. Main Street, Kent, Ct 06757.”
In any event, Kam-Ross wrote to the defendants on May 6, 2003 stating that they had concluded that the lease holder was Guo Guang Chen and that he, as “the lessee and owner of the restaurant should make a request to exercise the option.” On July 12, 2003 Kam-Ross again wrote to the defendants stating “Regarding our conversation 2 weeks ago, in which I told you that the current lease with Guo Guan Chen is going to expire on 10/31/03. I offered you a chance to sign a new lease with us based on the following conditions: 1. You must submit a plan to invest and improve the building, ground and restaurant. 2. You must take over the lower level apartment. 3. There will be a new higher rent for the restaurant and apartment. If you are still interested in operating the restaurant you must respond to us by Monday, 7/21/03. If we don’t hear from you, we will assume that you are no longer interested in operating the restaurant after the expiration of the lease. We will plan to take back the restaurant at the end of the current lease.”
On July 21, 2003 a copy of the April 9, 2003 letter from Jie Zheng and Guo Guang Chen was faxed again to Kam-Ross. On the same day Kam-Ross wrote back to these men to say: “We just received a faxed copy of your 4/9/03 letter. As I told you on the phone, the renewal option must be exercised 6 months prior to the expiration of the lease. As of today, it is a little over 3 months prior to the expiration of the lease on 10/31/03. Therefore, this request for the lease extension is not valid and is not acceptable by the owner. In addition, we could not recognize the signature of Guo Guan Chen.” It was not explained why the renewal option was not effective when it was first sent on April 9, 2003; this date was more than 6 months prior to the date of expiration.
The amended complaint is in three counts: The First Count alleges that the lease of October 3, 2001 has expired by lapse of time; the Second Count alleges that the plaintiff never consented to any assignment of the lease to the defendants who never had CT Page 9249 any right of possession of the premises; the Third Count alleges another variation of the claim that the lease has expired. The defendants deny the essential elements of the complaint and set forth a special defense that the plaintiff is estopped from claiming that the defendants are occupying without right.
It is tempting for the court to find that the true nature of this transaction is quite simple: the premises were leased to the corporation to operate a Japanese restaurant; the corporation has continuously operated the restaurant since that time although the ownership in the stock of the corporation has changed; the plaintiffs knew, or should have known of the true nature of the transaction when they purchased the property; timely notice of the intent to exercise the option to extend the lease was made; the rent has been continuously paid in a timely fashion and the lease is in full force and effect.
However, since the documentation does not match the true nature of the transaction, it is not advisable for me to find more than is necessary to decide the immediate issue before the court. For this reason, the court will simply find that the named defendants are not occupying the premises and, therefore, summary judgment cannot enter against them.
Judgment shall enter for the defendants, without costs.
BY THE COURT,
John W. Pickard CT Page 9250