Tomey Realty Co. v. Bozzuto's, Inc. , 168 Conn. App. 637 ( 2016 )

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TOMEY REALTY CO., INC. v. BOZZUTO’S, INC.
(AC 38057)
Alvord, Keller and Pellegrino, Js.
Argued April 6—officially released October 4, 2016
(Appeal from Superior Court, judicial district of
Waterbury, Roraback, J.)
Eric M. Grant, with whom, on the brief, were Joseph
P. Yamin and Melissa A. Scozzafava, for the appel-
lant (plaintiff).
John P. Santucci, for the appellee (defendant).
Opinion
KELLER, J. The plaintiff in this breach of contract
action, Tomey Realty Co., Inc., appeals from the judg-
ment of the trial court granting summary judgment on
the plaintiff’s complaint in favor of the defendant, Boz-
zuto’s, Inc.1 On appeal, the plaintiff claims that the court
erred in granting the defendant’s motion for summary
judgment because, in doing so, it ignored the operative
language of the parties’ integrated contractual
agreement regarding the lease of commercial property
and determined the amount of base rent owed under
the lease, as amended, by improperly relying on a
‘‘whereas’’ clause in the preamble of the lease assign-
ment. We reverse the judgment of the trial court.
The following procedural history and facts, which
the parties do not appear to dispute, are relevant to
this appeal. In August, 2007, the plaintiff entered into
a ten year commercial lease agreement (lease) with
its tenant, Southbury Food Center of Connecticut, Inc.
(Southbury Food). In the first paragraph of section 4
of the lease, the plaintiff and Southbury Food agreed
that the base rent for the first four years of the lease
would be $216,000 per year, payable in equal monthly
installments of $18,000. In the second paragraph of sec-
tion 4 of the lease, the plaintiff and Southbury Food
further agreed that for the fifth year of the lease, the
base rent would increase, and Southbury Food would
pay as annual base rent the sum of $216,000, plus the
cumulative increase in the Consumer Price Index (CPI)
over the previous four year period as issued by the
United States Department of Labor (fifth year cumula-
tive rent increase).2
On May 14, 2012, which was nine months into the
fifth year of the lease, the plaintiff, Southbury Food,
and the defendant executed a lease assignment (assign-
ment) pursuant to which the defendant replaced South-
bury Food as the plaintiff’s tenant under the lease.3 In
the preamble, the assignment contained several
‘‘whereas’’ clause provisions, the third of which pro-
vided as follows: ‘‘WHEREAS; the [current] annual base
rent for the period [of] September 1, 2011, to August
31, 2012, is [$216,000 (e.g., $18,000 per month)] . . . .’’4
The assignment further provided, in paragraph 5 of the
body of the document, that the plaintiff ‘‘is not in default
pursuant to any [l]ease provision and [Southbury Food]
is not in default of any [l]ease provision and remains
current in the payment of all obligations thereunder
. . . .’’ A copy of the lease was attached to the assign-
ment as exhibit A.
Contemporaneously with the execution of the assign-
ment, the plaintiff and the defendant also executed a
lease amendment (amendment), which amended, in
part, the lease originally entered into by the plaintiff
and Southbury Food. At the time the amendment was
executed, nine months of the fifth year of the lease
had elapsed. The amendment modified the base rent
calculation commencing in the sixth year of the lease
as follows: ‘‘With respect to Section 4 BASE RENTAL
. . . of the [l]ease, the third paragraph therein shall be
deleted and replaced with the following: ‘Thereafter,
the base rental for each year shall increase by 2.5% over
the immediately preceding year’s base rental and shall
be payable in twelve equal monthly installments on
the first day of each month without any prior demand,
deduction or setoff whatsoever.’ ’’ Thus, the rental
increases after the fifth year of the lease would no
longer track the CPI. The amendment made no other
changes to section 4 of the lease and specifically pro-
vided that ‘‘[e]xcept as provided hereinabove, the
remaining terms and conditions of the lease shall
remain unmodified and in full force and effect.’’ The
amendment did not alter the fifth year cumulative rent
increase set forth in the second paragraph of section
4 of the lease. It further stated, in section 1, which
deleted and replaced only the third paragraph of section
4 of the lease, that the base rent for each year would
increase by 2.5 percent over the immediately preceding
year’s base rent. When the lease and the amendment
are read together, the ‘‘immediately preceding year’s
base rental’’ refers to the base rental required to be
paid in the fifth year of the lease, which includes the
fifth year cumulative rent increase. A copy of the lease
was attached to the amendment as exhibit A.
As of April 1, 2015, the date on which the court issued
its memorandum of decision granting the defendant’s
motion for summary judgment and denying the plain-
tiff’s motion for summary judgment, the defendant had
not paid to the plaintiff, as base rent, any portion of the
fifth year cumulative rent increase, which the plaintiff
argues became due on September 1, 2012. Instead, com-
mencing on September 1, 2012, the beginning of the
sixth year of the lease, the defendant paid an annual
increase of 2.5 percent on a base rent of $216,000.
On March 20, 2013, the plaintiff commenced the pre-
sent action against the defendant, alleging that the
defendant had breached the lease due to its failure to
pay any portion of the fifth year cumulative rent
increase set forth in the second paragraph of section
4 of the lease, which it claimed became due and payable,
in twelve equal monthly installments, on September
1, 2012.
On September 12, 2013, the defendant filed its
answer, in which it asserted the special defenses of
novation, waiver, and estoppel. The defendant also filed
a counterclaim alleging that the May 14, 2012 amend-
ment constituted a novation which modified the ‘‘rent
escalation clause’’ to ‘‘limit increases annually to 2.5
[percent] in the event [Southbury Food] assigned its
lease to the defendant.’’
On November 20, 2014, the defendant filed a motion
for summary judgment. The plaintiff also filed a motion
for summary judgment on November 24, 2014.5 On Janu-
ary 7, 2015, the plaintiff filed an objection to the defen-
dant’s motion for summary judgment. The court heard
oral argument from the parties on their motions for
summary judgment on January 12, 2015.
As stated previously, on April 1, 2015, the court issued
a memorandum of decision, wherein it granted the
defendant’s motion for summary judgment and denied
the plaintiff’s motion for summary judgment.6 In its
memorandum of decision, the court stated in relevant
part: ‘‘The present dispute revolves around the question
of whether under the terms of the [lease, the assign-
ment, and the amendment], [the defendant] is obligated
to pay [the plaintiff the fifth year cumulative rent
increase] which was provided for in [section] 4 of the
[lease]. Both parties . . . moved for summary judg-
ment claiming that they are entitled to judgment as a
matter of law.
***
‘‘The [fifth year cumulative rent increase] in dispute
is defined in the following language in the second para-
graph of [section] 4 of the [lease]: For the fifth year of
the lease [beginning September 1, 2011], [t]enant agrees
to pay [l]andlord . . . base rental at the annual rental
amount of [$216,000], plus the cumulative increase in
the Consumer Price Index [CPI] . . . over the previous
four year period.
‘‘Neither the [assignment] nor the [amendment] make
specific reference to the [fifth year cumulative rent
increase] despite the fact that at the time these
agreements were executed in May, 2012, nine monthly
payments incorporating the [fifth year cumulative rent
increase] would already have become due under the
terms of the [lease].7 In addition, paragraph 5 of the
[assignment] recites that [Southbury Food] is not in
default of any lease provision and remains current in
the payment of all obligations thereunder. Those obliga-
tions are identified in the preamble of the [assignment]
as follows: [T]he current annual base rent for the period
[of] September 1, 2011, to August 31, 2012, is [$216,000]
[e.g., $18,000 per month].
‘‘It is true that generally whereas clauses are merely
explanations of the circumstances surrounding the exe-
cution of the contract and are not binding obligations
unless referred to in the operative provisions of the
contract. . . . DeMorais v. Wisniowski, 81 Conn. App.
595, 610, 841 A.2d 226, cert. denied, 268 Conn. 923, 848
A.2d 472 (2004). In this case, however, the body of the
contract provides that [Southbury Food] was current
in the very rent whose amount is specified only in the
preamble, thereby rendering enforceable the amounts
recited in that preamble.
***
‘‘Reading together all three of the written agreements
whose collective terms the parties have agreed must
be interpreted in order to resolve this dispute, there is
only one way to reconcile them and give them effect
according to their terms. The documents must be inter-
preted to conclude that the [fifth year cumulative rent
increase] in question was not incorporated into either
the [assignment] or the [amendment], both of which
were signed after the [fifth year cumulative rent
increase] had become due.’’ (Footnote in original; inter-
nal quotation marks omitted.)
On April 10, 2015, the plaintiff filed a motion to rear-
gue, which the court denied on June 1, 2015. This appeal
followed. Additional facts shall be set forth as nec-
essary.
The plaintiff claims that the court erred in granting
summary judgment in favor of the defendant because
it relied upon the third ‘‘whereas’’ clause in the preamble
of the assignment to determine that the amount of base
rent due in the fifth year of the lease remained at
$216,000 per year. Specifically, the plaintiff argues that
(1) the defendant took assignment of the entire lease,
including the fifth year cumulative rent increase set
forth in the second paragraph of section four of the
lease, (2) the fifth year cumulative rent increase was
neither modified nor eliminated by the amendment, and
(3) the amount of base rent due is specified in the lease
and the amendment, and the court should not have
considered the language of the ‘‘whereas’’ clause in the
preamble of the assignment. In opposition, the defen-
dant argues that the court properly granted summary
judgment in its favor because the assignment and the
amendment resulted in a novation whereby the plaintiff
released Southbury Food for all its responsibility under
the lease, and modified the defendant’s rental obliga-
tions under the lease in accordance with the assignment
and the amendment.8 We agree with the plaintiff and
conclude that the fifth year cumulative rent increase
was not eliminated indisputably by the language of the
amendment or the assignment and that, as a result, a
genuine issue of material fact exists as to whether the
defendant is obligated to include in its base rental pay-
ments an additional sum representing the fifth year
cumulative rent increase pursuant to the second para-
graph of section 4 of the lease.
We begin our analysis by stating the appropriate stan-
dard of review. ‘‘Practice Book [§ 17-49] provides that
summary judgment shall be rendered forthwith if the
pleadings, affidavits and any other proof submitted
show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as
a matter of law. . . . In deciding a motion for summary
judgment, the trial court must view the evidence in the
light most favorable to the nonmoving party. . . . The
party seeking summary judgment has the burden of
showing the absence of any genuine issue [of] material
facts which, under the applicable principles of substan-
tive law, entitle him to a judgment as a matter of law
. . . and the party opposing such a motion must pro-
vide an evidentiary foundation to demonstrate the exis-
tence of a genuine issue of material fact. . . . A
material fact . . . [is] a fact which will make a differ-
ence in the result of the case. . . . [T]he scope of our
review of the trial court’s decision to grant [a] motion
for summary judgment is plenary.’’ (Internal quotation
marks omitted.) Romprey v. Safeco Ins. Co. of America,
310 Conn. 304, 312–13, 77 A.3d 726 (2013). ‘‘[T]he genu-
ine issue aspect of summary judgment procedure
requires the parties to bring forward before trial eviden-
tiary facts, or substantial evidence outside the plead-
ings, from which the material facts alleged in the
pleadings can warrantably be inferred. . . . [S]um-
mary 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 before the [c]ourt.’’ (Internal
quotation marks omitted.) Rickel v. Komaromi, 144
Conn. App. 775, 791, 73 A.3d 851 (2013).
Because the motion for summary judgment at issue
in the present appeal concerns a commercial lease, we
also set forth relevant contract law principles. A lease
is a contract and, therefore, ‘‘it is subject to the same
rules of construction as other contracts. . . . The stan-
dard of review for the interpretation of a contract is
well established. Although ordinarily the question of
contract interpretation, being a question of the parties’
intent, is a question of fact . . . [when] there is defini-
tive contract language, the determination of what the
parties intended by their . . . commitments is a ques-
tion of law [over which our review is plenary]. . . . If
the language of [a] contract is susceptible to more than
one reasonable interpretation, [however] the contract
is ambiguous. . . .
‘‘In construing a written lease . . . three elementary
principles must be [considered]: (1) The intention of
the parties is controlling and must be gathered from
the language of the lease in light of the circumstances
surrounding the parties at the execution of the instru-
ment; (2) the language must be given its ordinary mean-
ing unless a technical or special meaning is clearly
intended; [and] (3) the lease must be construed as a
whole and in such a manner as to give effect to every
provision, if reasonably possible. . . . Furthermore,
when the language of the [lease] is clear and unambigu-
ous, [it] is to be given effect according to its terms. A
court will not torture words to import ambiguity [when]
the ordinary meaning leaves no room for ambiguity
. . . . Similarly, any ambiguity in a [lease] must ema-
nate from the language used in the [lease] rather than
from one party’s subjective perception of [its] terms.’’
(Citations omitted; footnote omitted; internal quotation
marks omitted.) Bristol v. Ocean State Job Lot Stores of
Connecticut, Inc., 284 Conn. 1, 7–8, 931 A.2d 837 (2007).
‘‘Contract language is unambiguous when it has a
definite and precise meaning about which there is no
reasonable basis for a difference of opinion. . . . [T]he
intent of the parties is to be ascertained by a fair and
reasonable construction of the written words and . . .
the language used must be accorded its common, natu-
ral, and ordinary meaning and usage where it can be
sensibly applied to the subject matter of the contract.’’
(Citation omitted; internal quotation marks omitted.)
Nash v. Stevens, 144 Conn. App. 1, 18, 71 A.3d 635, cert.
denied, 310 Conn. 915, 76 A.3d 628 (2013).
As previously noted, in the second paragraph of sec-
tion 4, titled ‘‘Base Rental,’’ the lease provides the fol-
lowing: ‘‘For the fifth year of the [l]ease, [t]enant agrees
to pay [l]andlord at [l]andlord’s office, without any prior
demand therefore, and without any deduction or setoff
whatsoever, base rental at the annual rental amount of
. . . ($216,000), plus the cumulative increase in the
[CPI as issued by the United States Department of Labor
over the previous four year period]. For example, if
[the CPI] was . . . 3% for each of the [l]ease’s first four
years, then the base annual rent shall be . . .
($241,920) ((($216,000 x .03) x4) + 216,000). The rent
shall be payable in twelve equal monthly installments
on the first day of each month.’’ Furthermore, in the
third paragraph of section 4, the lease provides the
following: ‘‘Thereafter, the base rental for each year
shall increase by the [CPI] over the immediately preced-
ing year’s base rental and shall be payable in twelve
equal monthly installments on the first day of each
month without any prior demand, deduction or set-
off whatsoever.’’
The amendment, which was executed between the
plaintiff and the defendant on May 14, 2012, provides
the following in relevant part: ‘‘[The plaintiff] and [the
defendant] agree that the [l]ease is hereby amended
and modified as follows . . . With respect to [section 4,
titled ‘‘Base Rental’’] of the [l]ease, the third paragraph
therein shall be deleted and replaced with the following:
‘Thereafter, the base rental for each year shall increase
by 2.5% over the immediately preceding year’s base
rental and shall be payable in twelve equal monthly
installments on the first day of each month without
any prior demand, deduction or set-off whatsoever.’ ’’
(Emphasis added.) Section 6 of the amendment pro-
vides that ‘‘[e]xcept as expressly provided hereinabove,
the remaining terms and conditions of the [l]ease shall
remain unmodified and in full force and effect.’’ The
amendment was signed by the plaintiff and the defen-
dant on May 14, 2012.
The assignment, which the plaintiff, defendant, and
Southbury Food executed on May 14, 2012, provides
the following in relevant part: ‘‘WHEREAS; the [l]ease
has an original term of [ten years, commencing on Sep-
tember 1, 2007, and ending on August 31, 2017]; and
‘‘WHEREAS; the [current] annual base rent for the
period [of September 1, 2011 to August 31, 2012, is
$216,000 (e.g., $18,000 per month)]; and
‘‘WHEREAS; [the plaintiff], [Southbury Food] and
[the defendant] fully acknowledge the validity of the
[l]ease . . . .’’
Following these and other recital provisions, the
assignment provides in relevant part: ‘‘[Southbury
Food] hereby assigns to [the defendant] all of [South-
bury Food’s] right, claim, title and interest in and to
the leased premises as set forth in the [l]ease . . .
‘‘[The defendant] hereby accepts [Southbury Food’s]
assignment of all of [Southbury Food’s] right, claim,
title and interest in and to the leased premises as set
forth in the [l]ease . . .
‘‘[The plaintiff] hereby consents to the aforesaid
assignment from [Southbury Food] to [the defendant],
subject to all the terms, conditions and restrictions
herein stated and subject to [the defendant’s] delivery
of the security deposit required under the [l]ease . . .
‘‘[The plaintiff] is not in default pursuant to any [l]ease
provision and [Southbury Food] is not in default of any
[l]ease provision and remains current in the payment
of all obligations thereunder . . .
‘‘Effective upon [Southbury Food’s] closing and sale
to [the defendant], [the plaintiff] hereby releases [South-
bury Food] of any and all liability and obligation under
said [l]ease . . .
‘‘[The defendant] acknowledges that [the plaintiff]
has not made any representation to [the defendant]
with respect to the leased premises . . .
‘‘[The defendant] acknowledges that it is familiar with
the leased premises and with the improvements situated
thereon and it hereby accepts the same in its present
condition ‘as is’ and that same is suitable and habitable
for its purposes; and . . .
‘‘In all other respects, the parties hereby ratify and
confirm the [l]ease.’’ The assignment was executed by
the plaintiff, the defendant, and Southbury Food on
May 14, 2012.
Although the operative provisions of the lease as
amended do not eliminate the payment of the fifth year
cumulative rent increase, one statement in the preamble
of the assignment creates an inconsistency in this
regard. This inconsistency stems from the third
‘‘whereas’’ clause in the assignment, which provides
that ‘‘the [current] annual base rent for the period [of
September 1, 2011, to August 31, 2012, is $216,000 (e.g.,
$18,000 per month)].’’ The second paragraph of section
4 of the lease, however, provides that in the fifth year,
the one year period that commences on September 1,
2011, and that the aforementioned ‘‘whereas’’ clause
references, the tenant is required to pay the fifth year
cumulative rent increase in addition to the original base
rent of $216,000. Additionally, pursuant to section 1 of
the amendment, the third paragraph of section 4 of the
lease required that commencing in the sixth year of the
lease, which began on September 1, 2012, the base rent
for each year would increase by 2.5 percent over the
base rent of the immediately preceding fifth year. Pursu-
ant to the lease, the base rent for the fifth year is
increased by the fifth year cumulative rent increase.
Thus, the ‘‘whereas’’ clause in the assignment is incon-
sistent with the fifth year cumulative rent increase set
forth in the lease, which is not modified in section 1
of the amendment or in any of the operative provisions
of the assignment. Pursuant to the second paragraph
of section 4 of the lease, in addition to the base rent
of $216,000, the defendant, as the tenant under the lease,
would be responsible to pay the additional fifth year
cumulative rent increase for that year of the lease,
thereby elevating the amount of the base rent by that
amount every year thereafter, in addition to the 2.5
percent increases contemplated to begin in the sixth
year of the lease by virtue of the amendment.9
The court erred in granting the defendant’s motion
for summary judgment because it improperly deter-
mined that there was no genuine issue of material fact
with respect to whether the parties to the assignment
intended to eliminate, from the calculation of the base
rent due for the sixth year of the lease and, thereafter,
the fifth year cumulative rent increase. The court, refer-
encing two parts of the assignment, the ‘‘whereas’’
clause, which indicated that the current base rent was
$216,000, and the provision that stated that Southbury
Food was current in its obligations under the lease,
concluded that because the amount of the base rent
payable at the time of the execution of the assignment
and amendment was specified only in the ‘‘whereas’’
clause, the defendant was entitled to summary judg-
ment. The court determined that the fifth year cumula-
tive rent increase was not incorporated into either the
assignment or the amendment. This determination,
however, failed to consider that neither the amendment
nor the assignment expressly deleted the lease provi-
sion modifying the fifth year cumulative rent increase,
and the amendment states that ‘‘the remaining terms
and conditions of the [l]ease shall remain unmodified
and in full force and effect.’’ A copy of the lease, which
contained the fifth year cumulative rent increase in
section 4, was attached to both the assignment and
the amendment.
‘‘[I]n construing contracts, [the court must] give
effect to all the language included therein, as the law
of contract interpretation . . . militates against inter-
preting a contract in a way that renders a provision
superfluous.’’ (Internal quotation marks omitted.)
Stratford v. Winterbottom, 151 Conn. App. 60, 72, 95
A.3d 538, cert. denied, 314 Conn. 911, 100 A.3d 403
(2014). The court disregarded this principle by failing
to give effect to operative provisions of the lease and
the amendment.10
In reviewing the operative clauses of the lease, the
amendment, and the assignment there remains a genu-
ine issue as to whether the parties intended that, com-
mencing September 1, 2012, the sixth year of the lease,
the defendant, as the new tenant, was obligated to pay,
in addition to the $216,000 original annual base rent,
both the fifth year cumulative rent increase contained
in the original lease as well as the 2.5 percent increase
set forth in section 1 of the amendment.
The operative clauses of the assignment provide the
following in relevant part: that, at the time of the assign-
ment, the defendant, as an assignee and as a tenant
under the lease, accepted all right, claim, title, and inter-
est in the leased premises that Southbury Food origi-
nally held under the lease; that neither the plaintiff nor
Southbury Food was in default pursuant to the lease;
that Southbury Food, up until the assignment, had
remained current in the payment of all obligations under
the lease;11 that, upon the complete execution of the
assignment, Southbury Food was no longer subject to
any liability or obligation under the lease; and that in
all other respects, the parties to the assignment ratified
and confirmed the lease, a copy of which was attached
to the assignment. The plaintiff may have a valid claim
that the third ‘‘whereas’’ clause in the preamble of the
assignment, inasmuch as it suggests that the annual
base rent for the fifth year of the lease was $216,000,
cannot, in and of itself, negate the fifth year cumulative
rent increase, an obligation set forth in the lease and
not modified by the operative provisions of the amend-
ment or the assignment. Where a recital provision and
an operative provision are inconsistent with each other
the operative provision must control. Weiss v. Smuld-
ers, 313 Conn. 227, 252, 96 A.3d 1175 (2014); 17A Am.
Jur. 2d. 371, Contracts § 383 (2004).
In accordance with this contract principle and the
principle that recitals in a contract are not binding obli-
gations unless referred to in the operative provisions
of the contract; DeMorais v. Wisniowski, supra, 81
Conn. App. 610; summary judgment was improperly
granted in the defendant’s favor. There remains a genu-
ine issue of material fact as to whether the parties
intended to modify the amount of base rent due in the
fifth and subsequent years of the lease and the intent
of the plaintiff and the defendant must be determined in
light of the operative provisions of the three integrated
documents that comprise their lease agreement.12
Accordingly, we conclude that the court improperly
granted the defendant’s motion for summary judgment.
The judgment is reversed and the case is remanded
for further proceedings in accordance with this opinion.
In this opinion the other judges concurred.
1
The court’s summary judgment disposed of all counts brought against
the defendant by the plaintiff. After the court’s decision in favor of the
defendant on its motion for summary judgment, however, the defendant’s
counterclaim against the plaintiff remained pending.
2
The lease provided the following example to illustrate how the fifth
year cumulative rent increase would be calculated: ‘‘For example, if [the
cumulative rent increase in the [CPI] was three percent (3%) for each of the
[l]ease’s first four years, then the base annual rent shall be . . . ($241,920)
((($216,000 x .03) x 4) + 216,000).’’
3
Southbury Food assigned all of its right, claim, title, and interest in and
to the demised premises as set forth in its lease with the plaintiff.
4
The plaintiff alleged in its complaint that ‘‘[o]n or about October 12,
2011, Tomey Realty agreed to a temporary rent concession for one year
retroactive to August 1, 2011. Pursuant to the temporary concession, the
base rental remained $216,000 . . . for the fifth year of the lease, and the
[fifth year cumulative rent increase] was delayed until September 1, 2012.
All other aspects of the lease remained in effect pursuant to the temporary
concession.’’ A copy of the alleged temporary concession letter was attached
to the plaintiff’s complaint as an exhibit.
5
The plaintiff attached copies of the following documents to its motion:
an affidavit of Edward Tomey, the plaintiff’s director; the lease; the assign-
ment; the amendment; the affidavit of Keith Sullivan, the plaintiff’s accoun-
tant; a table providing CPI data from 1913 to 2014; and a table documenting
the defendant’s rental payments made to the plaintiff from September, 2012
to November, 2014.
6
The plaintiff did not appeal from the court’s denial of that motion.
7
‘‘While the plaintiff alleges and [the defendant] references the existence
of a verbal understanding between [the plaintiff] and Southbury [Food]
pursuant to which payment of the [fifth year cumulative rent increase] would
be deferred for a year, the parol evidence rule forbids the use of extrinsic
evidence outside the four corners of the contract to vary or contradict its
terms. Alstom Power, Inc. v. Blacke-Durr, Inc., 269 Conn. 599, 609, 849 A.2d
804 (2004).’’
8
Furthermore, the defendant argues that if this court affirms the judgment
of the trial court, the case should be remanded to that court solely for
adjudication of its counterclaim, which seeks attorney’s fees pursuant to
the lease. Because we are reversing the judgment, we need not consider
this claim.
9
There is also a genuine issue of material fact as to the meaning and
import of paragraph 5 of the assignment, an operative provision, which
states that Southbury Food ‘‘is not in default of any [l]ease provision and
remains current in the payment of all obligations thereunder . . . .’’ Because
the lease was not assigned or amended until May 14, 2012, nine months
into the fifth year, the plain language of the lease would dictate that South-
bury Food had begun to pay a base rent that included the fifth year cumula-
tive rent increase effective September 1, 2011. Both parties, however, allege
the existence of a temporary rent concession. See footnotes 4 and 7 of this
opinion. Attached to the plaintiff’s complaint is a letter, addressed to Barry
Tarnowicz, the president and chief executive officer of Southbury Food,
dated October 12, 2011, wherein Keith Sullivan, a certified public accountant
who provided services for the plaintiff, indicated that the plaintiff was willing
to permit Southbury Food to pay $216,000 in base rent for an additional
year, retroactive to August 1, 2011. The letter further provided that ‘‘[a]ll
aspects of the current lease remain in effect.’’ The defendant also attached
this letter to its motion for summary judgment, along with a financial state-
ment of Southbury Food that indicated the following in relevant part:
‘‘[Southbury Food] leases its premises from [the plaintiff] . . . . Rent
expense was $216,000 for each of the years ended December 31, 2011 and
2010. Effective September 1, 2011, in addition to the base rent, [Southbury
Food] was to also pay the cumulative increase in the [CPI] over the previous
four year period. The rent would then increase annually by the increase in
the CPI each year through August 31, 2017. This increase was delayed until
September 1, 2012.’’ The parties disagree as to the effect, if any, of the
temporary rent concession on the terms of the lease prior to the execution
of the assignment. The court disregarded the temporary rent concession,
referring to it as a ‘‘verbal understanding,’’ and concluded that it was inadmis-
sible, under the parol evidence rule, to explain the intent of the parties. We
are not convinced that evidence of the temporary rent concession should
have been precluded, as it is a generally recognized principle that ‘‘[t]he
parol evidence rule does not forbid the contradiction of any instrument or
portion of an instrument which purports merely to recite facts.’’ (Emphasis
added.) 11 S. Williston, Contracts (4th Ed. 2012) § 33.46, pp. 1222–23; see
also Hartford-Connecticut Trust Co. v. Devine, 97 Conn. 193, 116 A. 239
(1922). If the factual recitations in the assignment, stating that the current
annual base rent for the fifth year of the lease was $216,000 and that South-
bury was not in default of any lease provision and remained current in the
payment of all obligations thereunder, are merely factual, they may possibly
be contradicted by evidence of the temporary rent concession.
10
‘‘As a general rule, [r]ecitals in a contract, such as ‘whereas’ clauses,
are merely explanations of the circumstances surrounding the execution of
the contract, and are not binding obligations unless referred to in the opera-
tive provisions of the contract.’’ (Internal quotation marks omitted.) DeMor-
ais v. Wisniowski, 81 Conn. App. 595, 610, 841 A.2d 226, cert. denied, 268
Conn. 923, 848 A.2d 472 (2004). ‘‘[I]f the recitals in a contract are clear
and the operative part is ambiguous, the recitals govern the construction;
however, if the recitals are ambiguous and the operative part is clear, the
operative part must prevail. If both the recitals and the operative part are
clear, but they are inconsistent with each other, the operative part must
control.’’ (Emphasis added.) 17A Am. Jur. 2d 371, Contracts § 383 (2004).
The United States Court of Appeals for the Second Circuit also has ‘‘held
that [a]lthough a statement in a whereas clause may be useful in interpreting
an ambiguous operative clause in a contract, it cannot create any right
beyond those arising from the operative terms of the document.’’ (Internal
quotation marks omitted.) Aramony v. United Way of America, 254 F.3d
403, 413 (2d Cir. 2001); accord Abraham Zion Corp. v. Lebow, 761 F.2d 93,
103 (2d Cir. 1985); Genovese Drug Stores v. Connecticut Packing Co., 732
F.2d 286, 291 (2d Cir. 1984). Additionally, in Weiss v. Smulders, 313 Conn.
227, 251–52, 96 A.3d 1175 (2014), an appeal involving an alleged violation
of the parol evidence rule, our Supreme Court also noted that the substantive
provisions of a written agreement control over recital provisions, particularly
where the recital provisions pertain to a collateral matter that falls outside
the scope of the subject matter of the written agreement. See also id.,
252 n.13.
11
As previously noted in footnote 9 of this opinion, the statement that
Southbury Food was current in the payment of all its obligations under the
lease may be contradicted, at trial, by the temporary rent concession alleg-
edly negotiated between the plaintiff and Southbury Food in October, 2011.
12
We note that the defendant, in its counterclaim, alleges that the assign-
ment and the amendment resulted in a novation whereby a new lease was
formed, under which the defendant’s rental obligation was modified such
that the fifth year cumulative rent increase in the lease was substituted with
a ‘‘fixed rental formula.’’ ‘‘[A]n essential element of any novation is the
extinguishing of the original contract by substitution of a new one.’’ Flagg
Energy Development Corp. v. General Motors Corp., 244 Conn. 126, 145,
709 A.2d 1075 (1998), overruled on other grounds by Ulbrich v. Groth, 310
Conn. 375, 78 A.3d 76 (2013). ‘‘A recognized test for whether a later agreement
between the same parties to an earlier contract constitutes a substitute
contract looks to the terms of the second contract. If it contains terms
inconsistent with the former contract, so that the two cannot stand together
it exhibits characteristics . . . indicating a substitute contract.’’ (Internal
quotation marks omitted.) Alarmax Distributors, Inc. v. New Canaan Alarm
Co., 141 Conn. App. 319, 331–32, 61 A.3d 1142 (2013). At this point, we
decline to comment on the merits of the defendant’s novation claim.