Pack 2000, Inc. v. Cushman ( 2020 )

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PACK 2000, INC. v. EUGENE C. CUSHMAN
(AC 41350)
(AC 41351)
DiPentima, C. J., and Keller and Bright, Js.
Syllabus
The plaintiff sought, in two separate actions, specific performance of two
options to purchase certain real property that it had been leasing from
the defendant. The parties executed two lease agreements, each of which
contained an option to purchase the leased property. In declining to
sell the property when the plaintiff exercised the options in 2003, the
defendant claimed that the plaintiff had not complied with the conditions
of the agreements and the plaintiff thereafter brought the present
actions. The trial court rendered judgments for the plaintiff, concluding,
inter alia, that the plaintiff was entitled to specific performance of the
options because it had substantially complied with the conditions of
the parties’ agreements. On the defendant’s appeal, this court reversed
the trial court’s judgments, concluding that the trial court improperly
applied a substantial compliance rather than a strict compliance stan-
dard in determining whether the plaintiff had satisfied the conditions
of the parties’ agreements and that the trial court incorrectly concluded
that the plaintiff had retained the right to exercise the options. On the
granting of certification, the plaintiff appealed to the Supreme Court,
which reversed this court’s decision and remanded the case with direc-
tion to affirm the judgments of the trial court. The trial court thereafter
rendered judgments and final orders thereon, setting the purchase price
of each property based on the average of the present day value appraisals
required by the court and submitted by the parties. On appeal to this
court, the plaintiff claimed that the trial court erred in failing to deter-
mine the purchase prices based on appraisal values of the properties
in 2003, and the defendant claimed in his cross appeal that the trial
court abused its discretion in failing to use the current value appraisal
set by his appraiser. Held:
1. The trial court erred in ordering a specific performance remedy that was
contrary to the terms of the purchase options; having concluded that
the plaintiff was entitled to a remedy of specific performance, the trial
court, in accordance with the unambiguous language of the agreements,
was required to order that the purchase price of each property was to
be based on the appraised value of the property as of November 22,
2003, which was three months after the plaintiff exercised its options,
the trial court, in basing the purchase prices of the properties on their
values as of January, 2017, which was an improper application of the
automatic appellate stay, deprived the plaintiff to its detriment of the
Supreme Court’s judgment, which affirmed the trial court’s 2008 final
judgments, by modifying its 2008 award of specific performance and
ordering a remedy inconsistent with the parties’ agreements, and the
trial court’s present day valuation deprived the plaintiff of the benefit
of its bargain while giving a significant windfall to the defendant.
2. The trial court erred in ordering the plaintiff to make rent and use and
occupancy payments and by refusing to credit any such payments against
the purchase prices the plaintiff was required to pay for the properties,
as the plaintiff’s lessee obligations terminated when it exercised its
options on August 22, 2003, and thereafter became the equitable owner;
although the defendant claimed that equitable conversion was inapplica-
ble because the plaintiff failed to plead the doctrine in its complaint,
equitable conversion was not a separate cause of action but, rather, a
result that arose out of a successful claim for specific performance,
and, although the plaintiff continued to pay rent after it exercised its
options, such payments, which were required under the lease, did not
constitute a judicial admission on behalf of the plaintiff that it was
obligated to make such payments, and the parties were not required to
complete the appraisal process and to establish purchase prices for the
properties in order for equitable title to pass to the plaintiff, nor was
the plaintiff required to tender payment when it exercised its options
because payment was not a condition precedent in the purchase options,
and the defendant’s unexcused repudiation of the contracts was what
prevented the completion of the appraisal process and the transfer of
the properties to the plaintiff, and contrary to the defendant’s argument,
Connecticut case law does not require a showing of bad faith for the
doctrine of equitable conversion to apply; moreover, the trial court erred
in concluding that the plaintiff was not entitled to credit any rent or
use and occupancy payments made after the plaintiff exercised its
options and became the equitable owner of the properties as a reward
of damages against the purchase price of the properties, the plaintiff
was ordered to make certain such payments and did so to preserve its
property rights, the defendant received more than the purchase price
of the properties, and he had no legal or equitable entitlement to such
funds; furthermore, the defendant could not prevail on his claim that
he should receive interest on the purchase price of the properties based
on their 2003 appraised values, as the defendant raised this issue for
the first time on appeal and this court was not obligated to consider it.
3. The trial court did not err in failing to set the purchase price for one of
the properties based on the appraised value submitted by the defendant,
as there was no basis for concluding that the court made an erroneous
factual finding based on documents regarding the appraisal conducted
by the defendant and the plaintiff’s purported acceptance of that
appraisal, as such evidence was never admitted in the trial court; con-
trary to the defendant’s claim, the record demonstrated that the plain-
tiff’s agent believed that the appraisal submitted by the defendant would
be averaged with the appraisal submitted by the plaintiff and that the
evidence on which the defendant relied was only submitted as an attach-
ment in support of a memorandum, and, in deciding a case, this court
cannot resort to documents or exhibits which were not part of the record.
Argued October 23, 2019—officially released June 30, 2020
Procedural History
Action, in two cases, for specific performance of
options to purchase certain of the defendant’s certain
real property, and for other relief, brought to the Supe-
rior Court in the judicial district of New London, where
the matters were consolidated and tried to the court,
Abrams, J.; judgments for the plaintiff, from which the
defendant appealed to this court, Lavine, Beach and
Lavery, Js., which reversed the trial court’s judgments
and remanded the cases to the trial court with direction
to render judgments for the defendant, and the plaintiff,
on the granting of certification, appealed to the
Supreme Court, which reversed this court’s decision
and remanded the cases to the trial court with direction
to affirm the judgments of the trial court; thereafter,
the trial court, Abrams, J., rendered judgments setting
the purchase prices of the properties, from which the
plaintiff filed separate appeals, and the defendant filed
cross appeals; subsequently, this court granted the
plaintiff’s motion to consolidate the appeals. Reversed;
judgments directed.
Eric W. Callahan, for the appellant-cross appellee in
AC 41350 and AC 41351 (plaintiff).
Ralph J. Monaco, with whom, on the brief, was Eric
J. Garofano, for the appellee-cross appellant in AC
41350 and AC 41351 (defendant).
Opinion
BRIGHT, J. In these consolidated appeals, the plain-
tiff, Pack 2000, Inc., appeals from the judgments of
the trial court, which determined the amount due the
defendant, Eugene C. Cushman, for two properties he
had contracted to sell to the plaintiff.1 The plaintiff
claims that the trial court erred in concluding that (1)
the purchase prices for the properties, located in Groton
and New London, should be based on their current
appraised values, rather than their appraised values
in 2003, (2) the plaintiff was required to pay use and
occupancy for its continued use of the Groton property
retroactive to June 1, 2014, until the closing of the sale
of the property to the plaintiff, and (3) the plaintiff was
not entitled to credits toward the purchase price of
each property for moneys paid as rent or use and occu-
pancy after it exercised its options to purchase the
properties. The defendant filed cross appeals, claiming
that the trial court abused its discretion by failing to
use the current appraised value set by his appraiser as
the purchase price for the Groton property. We agree
with the plaintiff on all of its claims and disagree with
the defendant as to his cross appeals. Accordingly, we
reverse the judgments of the trial court and remand the
cases with direction to determine the purchase prices
of the properties pursuant to the plaintiff’s exercise of
its options to purchase the properties in 2003, that the
court credit against those purchase prices any payments
made by the plaintiff to the defendant for use of the
properties after its exercise of its purchase options,
and, to the extent that the payments to the defendant
on each property, after the option became effective,
exceeded the purchase price of that property, that the
court order any overpayment be refunded to the
plaintiff.
This case returns to us after our Supreme Court’s
decision in Pack 2000, Inc. v. Cushman, 311 Conn. 662,
89 A.3d 869 (2014), in which the court reversed the
decision of this court; see Pack 2000, Inc. v. Cushman,
126 Conn. App. 339, 11 A.3d 181 (2011); and remanded
the case to us with direction to affirm the judgments
of the trial court.2 Following our affirmance of the trial
court’s judgments, additional proceedings occurred in
the trial court. We will address those proceedings and
the judgments that followed, which are the subject of
the present appeal, after setting forth the relevant facts.
The opinion of our Supreme Court sets forth the
following relevant facts and procedural history, as sup-
plemented by the record. ‘‘In July, 2002, the plaintiff,
the defendant and ARCO Corporation (ARCO),3 a corpo-
ration controlled by the defendant, entered into a busi-
ness transaction in which two Midas . . . muffler
shops4 (shops) were to be transferred from ARCO to
the plaintiff. As part of the transaction, the parties exe-
cuted a number of agreements, including [1] two lease
agreements, under which the defendant leased [to the
plaintiff] the [real property on which] the shops are
located . . . [2] a management agreement, under
which the plaintiff assumed responsibility for the man-
agement and operation of the shops . . . [3] a letter
of intent . . . and [4] two promissory notes . . . .
‘‘Each lease agreement contains a clause . . . that
provide[d] the plaintiff with an option to purchase the
leased [property] subject to certain terms and condi-
tions. The language of the two clauses is essentially
identical. Each clause provides in relevant part: So long
as [the plaintiff] has been in compliance with the terms
and conditions of this [l]ease, the [l]etter of [i]ntent,
and [m]anagement [a]greement . . . and is in compli-
ance with such instruments when the option is exer-
cised, [the plaintiff] shall have the option to purchase
the real estate subject to this lease. . . .
‘‘Under the terms of the two lease agreements, the
management agreement and the promissory notes, the
plaintiff was required to make a number of periodic
payments both to the defendant and to certain third
parties in order to exercise the options.5 Specifically,
the plaintiff was required to pay rent to the defendant
. . . to make payments on both promissory notes . . .
until the notes were fully paid and to pay all accounts,
including, but not limited to, utilities, telephone service,
real estate taxes, and hazard and liability insurance as
well as an equipment lease. . . .6
‘‘On August 22, 2003, the plaintiff’s vice president, M.
Paulina Anderson, faxed a letter to the defendant in
which she stated that she wanted to finalize the pur-
chase of the shops and exercise the option[s] to pur-
chase the real estate by the end of 2003.’’ (Footnotes
added and omitted; internal quotation marks omitted.)
Pack 2000, Inc. v. Cushman, supra, 311 Conn. 660–68.
Anderson further stated: ‘‘I have talked to our bank and
they can finance the deal for us. The option in the leases
indicates we need to agree on an appraiser, to come
up with a price on the real estate. I want to use Arnold
(Grant) whom I have used before. Please let me know
if you agree to us using him, so I can order the apprais-
als.’’ ‘‘On August 29, 2003, Anderson sent a second letter
to the defendant in which she . . . indicated that Ban-
terra Bank (bank) could not commit to financing the
purchase until it had ascertained the value of the defen-
dant’s realty. [Anderson added: I have not heard from
you on the appraisals. In order to get a price so we can
close this year, I went ahead and (ordered) them. As I
indicated on my fax to you last Friday, I worked with
Arnold (Grant) before . . . . Please let me know your
thoughts on this. If you elect to proceed with your own
appraisals please do so ASAP so we can still close
this year.]
‘‘On September 2, 2003, the defendant, on behalf of
ARCO, sent a letter to Anderson in which he stated that
the plaintiff was not in compliance with the terms and
conditions of the management agreement. Specifically,
the letter stated: The installment payment regarding the
. . . [m]anagement [a]greement which was due Sep-
tember 1, 2003 has not been received. . . . Timely pay-
ment of the note was and is a material condition of the
agreement. . . . You are hereby put on notice that this
late payment, and all of the prior late payments, and
any future late payments [put] you out of compliance
with the terms and conditions of the Management
Agreement. Subsequent acceptance of the September,
2003 payment (or any future payment tendered after
the date due) will not cure the non-compliance, nor
does ARCO . . . waive any rights or consequences
which flow from your non-compliance. There is no
record of the plaintiff having specifically responded to
this letter. [It is apparent, however, that the parties
treated this letter as the defendant’s repudiation of the
plaintiff’s right to exercise the purchase options due to
its late payments.] . . .
‘‘On July 17, 2006, the plaintiff commenced these
actions against the defendant claiming that it was enti-
tled to specific performance of the options to purchase
the defendant’s realty. In its disclosure of defense, filed
on August 4, 2006, the defendant argued that the plain-
tiff’s claim was without merit because, among other
things, the plaintiff had not complied with the terms of
one of the promissory notes and the conditions of the
lease at the time of its attempt to exercise the options,
and, therefore, the options had been forfeited or termi-
nated by the plaintiff’s fault or noncompliance. . . .
***
‘‘On August 11, 2008, the trial court rendered judg-
ments in favor of the plaintiff. The court determined
that the plaintiff had retained the right to exercise the
options because it had substantially complied with the
terms and conditions of the [parties’ agreements]. . . .
The court also determined that the plaintiff had effec-
tively exercised the options on August 22, 2003, and
was entitled to specific performance. . . .
‘‘The defendant appealed to the Appellate Court from
the judgements of the trial court, claiming, inter alia,
that the trial court was required to apply a strict rather
than a substantial compliance standard in determining
whether the plaintiff had satisfied the terms of the lease
and management agreements and, in addition, that the
trial court incorrectly concluded that the plaintiff had
retained the right to exercise the options notwithstand-
ing its late payments to the defendant. . . . The Appel-
late Court agreed with the defendant. . . . In accor-
dance with these conclusions, the Appellate Court
reversed the judgments of the trial court and remanded
the case to that court with direction to render judgments
for the defendant.’’ (Citations omitted; footnotes added
and omitted; internal quotation marks omitted.) Pack
2000, Inc. v. Cushman, supra, 311 Conn. 668–73. Our
Supreme Court subsequently reversed this court’s deci-
sion and remanded the case back to this court with
direction to affirm the judgments of the trial court.7
Id., 694.
On July 14, 2014, after we affirmed the judgments of
the trial court, the plaintiff filed a motion for postjudg-
ment orders. In its motion, the plaintiff requested that
the trial court issue (1) an order setting the purchase
prices of the Groton and New London properties to
reflect the 2003 appraisal values rendered by Grant,8
(2) an order confirming that, since August, 2003, the
plaintiff—by way of monthly rent payments—has paid
the entire purchase price for the Groton and New Lon-
don properties, and, therefore, the defendant immedi-
ately must transfer the properties to the plaintiff free
and clear of all liens and encumbrances, and (3) an
order requiring the defendant immediately to reimburse
the plaintiff the sum of the overpayments of the pur-
chase price applicable to the properties. On November
17, 2014, the defendant filed a motion and memorandum
in opposition to the plaintiff’s motion. In its July 6, 2015
order addressing the plaintiff’s motion, the court stated,
‘‘[i]n view of the fact that the parties could not proceed
with the appraisal process until the recent termination
of the appellate stay, they are ordered to [do] so immedi-
ately. The values of the property shall be present day
and the court will not entertain any attempts to revisit
its ruling by entertaining further evidence. None of the
payments made by the plaintiff since its exercise of the
option count toward the purchase price.’’9
On July 13, 2016, the plaintiff filed a motion for com-
pliance, requesting that the court set a deadline for the
exchange of appraisals. The defendant objected to the
plaintiff’s motion on July 22, 2016, arguing that the
plaintiff had never issued a demand for the exchange
of appraisals.10 On December 6, 2016, the court ordered
the parties to exchange appraisals on or before January
15, 2017. Grant appraised the Groton and New London
properties, as of July 6, 2016, at $700,000 and $610,000,
respectively. The defendant’s appraiser, Robert Sil-
verstein, appraised the Groton property as of January
4, 2017, at $1,100,000 and the New London property as
of September 21, 2016, at $720,000. On April 7, 2017,
following the mutual exchange of appraisals, the plain-
tiff filed a motion for final judgments. On January 22,
2018, the trial court rendered judgment in each case,
holding: ‘‘Based on the submitted appraisals, pursuant
to prior court orders and [§] 2 (b) of the applicable
leases, the sale price for the Groton property is $900,000
and the New London property is $650,000.’’ On February
9, 2018, the plaintiff filed the present appeals challeng-
ing the trial court’s judgments, as well as its July 6,
2015, and May 27, 2016 orders. The defendant’s cross
appeals followed. Additional facts will be set forth as
necessary.
I
The plaintiff first claims that the court erred when,
as part of its award of specific performance, it deter-
mined the purchase prices of the Groton and New Lon-
don properties based on the average of both parties’
present day appraisals instead of determining the pur-
chase prices based on 2003 appraisal values. The plain-
tiff claims that the court’s judgment in each case is
contrary to the parties’ agreements. We agree.
We begin with the standard of review and legal princi-
ples relevant to our resolution of this claim. ‘‘[W]e note
that the standard of review for a lease, which is a con-
tract, is plenary. Although ordinarily the question of
contract interpretation, being a question of the parties’
intent, is a question of fact . . . [w]here there is defini-
tive contract language, the determination of what the
parties intended by their contractual commitments is
a question of law.’’ (Internal quotation marks omitted.)
Howard-Arnold, Inc. v. T.N.T. Realty, Inc., 315 Conn.
596, 602, 109 A.3d 473 (2015).
‘‘It is a general rule that a contract is to be interpreted
according to the intent expressed in its language and
not by an intent the court may believe existed in the
minds of the parties. . . . When the intention conveyed
by the terms of an agreement is clear and unambiguous,
there is no room for construction. . . . [A] court can-
not import into [an] agreement a different provision
nor can the construction of the agreement be changed
to vary the express limitations of its terms.’’11 (Citations
omitted; internal quotation marks omitted.) Levine v.
Massey, 232 Conn. 272, 278, 654 A.2d 737 (1995).
The following additional facts are relevant to our
resolution of the plaintiff’s first claim. In its August 11,
2008 memorandum of decision, the trial court deter-
mined that the plaintiff exercised its options to pur-
chase the Groton and New London properties by way
of a letter sent by fax to the defendant. The court stated:
‘‘In order for the exercise of an option to be effective, it
must strictly comply with the contractual requirements
regarding its exercise . . . . In this matter, the [m]an-
agement [a]greement and the [l]eases simply require
the exercise of either option be in writing and occur
within a given time period. The August 22, 2003 fax
clearly fulfills both requirements.’’12 The court also
determined that the plaintiff was entitled to specific
performance as a matter of equity. The court stated:
‘‘As set forth [previously], the court found that [the]
plaintiff had the right to exercise the options at issue
and that it did so effectively. To allow [the defendant]
to enjoy the benefits of his bargain with [the] plaintiff
while avoiding the less financially attractive elements
of the transaction would be inequitable. As a result, the
court finds that specific performance of the sale of the
New London and Groton parcels pursuant to the terms
set forth in the agreements between the parties is the
appropriate remedy in this matter.’’ The court then
ordered the parties immediately to ‘‘proceed with the
appraisal process on both the New London parcel and
the Groton parcel pursuant to the terms contained in
§ 2 (b) of each [l]ease.’’13
In accordance with Practice Book § 61-11 (a), the
proceedings to enforce the trial court’s decision were
stayed automatically until the plaintiff filed its appeals
on November 21, 2008, after which time the proceedings
were stayed until the cases were remanded to the trial
court after our Supreme Court’s final determination of
the consolidated appeal in Pack 2000, Inc. v. Cushman,
supra, 311 Conn. 662.14
On December 19, 2014, following the termination of
the appellate stay, the plaintiff moved to clarify the
court’s August, 2008 memorandum of decision. Specifi-
cally, the plaintiff sought clarification with respect to
the date that the court intended the parties to use for
appraisal purposes when valuing the Groton and New
London properties. In its motion, the plaintiff main-
tained that requiring the parties to appraise the proper-
ties according to present day values would be wholly
inconsistent with the court’s determination that the
plaintiff exercised its options in August, 2003. The
defendant filed an objection to the plaintiff’s motion
on January 9, 2015, arguing that no purchase prices were
established in 2003 because the parties never agreed
on a mutually acceptable appraiser, and—pursuant to
the terms of the lease agreements—each party would
have needed to appoint its own appraiser for the court
to establish a purchase price based on the average of
the values rendered. On May 19, 2015, the court issued
an order on the plaintiff’s motion for clarification, stat-
ing: ‘‘The order does not permit the use of any prior
appraisals nor does it limit itself to any particular time.
In view of the fact that the parties could not proceed
with the appraisal process until the recent termination
of the appellate stay, they are ordered to [do] so immedi-
ately. The values of the property shall be present day
and the court will not entertain any attempts to revisit
its ruling by entertaining further evidence.’’15
In accordance with the court’s order, the parties sub-
mitted to the court, and exchanged with each other,
current appraisals of the properties as of July 6, 2016,
September 21, 2016, and January 4, 2017. On the basis
of the parties’ appraisals, the trial court rendered judg-
ment in each case and set the purchase price of the
Groton property at $900,000 and the New London prop-
erty at $650,000. The plaintiff claims on appeal that the
court erroneously concluded that the automatic stay
precluded the use of an appraisal date that preceded
the Supreme Court’s decision, in particular, August 22,
2003—the date that the plaintiff exercised its options.
On the basis of the terms of the lease agreements and
the court’s determination that the plaintiff exercised its
options on August 22, 2003, we agree that the trial
court erred by ordering the parties to use present day
appraisal values for the properties. We conclude, how-
ever, that the correct appraisal date, pursuant to the
terms of the lease and management agreements, is
November 22, 2003, three months after the plaintiff
exercised its options.
As a preliminary matter, neither party argues on
appeal that the terms of the purchase options are ambig-
uous. Instead, the parties disagree as to whether the
appellate stay affected the relevant appraisal date and
by extension, the purchase prices of the properties. We
conclude that the appellate stay is irrelevant to our
resolution of this claim. Furthermore, we need look no
further than to the unambiguous terms of the purchase
options and the plaintiff’s exercise thereof to conclude
that the court erred in fashioning a specific performance
remedy that was contrary to the unambiguous terms
of the parties’ contracts.
As previously stated in this opinion, our Supreme
Court, in May, 2014, affirmed the trial court’s determina-
tion that the plaintiff exercised its options to purchase
the Groton and New London properties in August, 2003.
After remand, in its July, 2015 order, the trial court
reiterated its decree of specific performance but held
that the ‘‘values of the property shall be present day.’’
The court reached this conclusion because its August
11, 2008 order that the parties immediately proceed
with the appraisal process for the properties did ‘‘not
permit the use of any prior appraisals nor [did] it limit
itself to any particular time,’’ and because the appellate
stay prevented the parties from conducting appraisals
at an earlier date.
We first address the trial court’s reliance on the auto-
matic appellate stay. Practice Book § 61-11 provides
that, during the time when an appeal can be taken and
while a timely filed appeal is pending, ‘‘proceedings to
enforce or carry out the judgment or order shall be
automatically stayed until the . . . final determination
of the cause.’’ ‘‘The finality of a trial court judgment is
not directly affected by the fact that an appeal automati-
cally stays the enforcement of a judgment. See Practice
Book § [61-11] (formerly § [4046]). The stay does not
vacate the judgment obtained by the successful litigant.
It merely denies that party the immediate fruits of his
or her victory . . . in order to protect the full and
unhampered exercise of the right of appellate review.
. . .
‘‘The finality of a judgment may, however, depend
upon the outcome of the pending appeal. If the trial
court’s judgment is sustained, or the appeal dismissed,
the final judgment ordinarily is that of the trial court.
If, however, there is reversible error, the final judgment
is that of the appellate court.’’ (Citations omitted; inter-
nal quotation marks omitted.) Preisner v. Aetna Casu-
alty & Surety Co., 203 Conn. 407, 414–15, 525 A.2d
83 (1987). Because this court, after remand from the
Supreme Court, affirmed the judgments of the trial
court, the 2008 judgments of the court are the final
judgments, and the plaintiff is entitled to the fruits of
those judgments. The court, however, deprived the
plaintiff of the benefits of those judgments. It essentially
modified its 2008 award of specific performance, to the
detriment of the plaintiff, by basing the purchase prices
of the properties on the values of the properties as of
January, 2017, approximately eight years after the final
judgments. We conclude that this was an improper
application of the automatic appellate stay.
We now turn to the court’s rationale that its August
11, 2008 judgments did ‘‘not permit the use of any prior
appraisals nor [did] it limit itself to any particular time.’’
We view this statement as a reflection of the court’s
view that it had discretion to determine the appropriate
appraisal date. We conclude that the court did not have
discretion to fashion a remedy inconsistent with the
parties’ agreements.
The purchase option language of the lease agree-
ments is clear: ‘‘The option shall be exercised by [the
plaintiff] giving [the defendant] three months advance
notice in writing.’’ Once the option is exercised, ‘‘[t]he
purchase price is to be determined by a mutually accept-
able MAI appraiser. If the parties cannot agree on a
single appraisal, then each party shall appoint [a] MAI
appraiser. The price shall be set by the average of the
appraisals. [The plaintiff] shall pay the cost of the mutu-
ally acceptable appraiser or [the plaintiff’s] appraiser.
Should [the defendant] deem it necessary to retain an
appraiser, [the defendant] shall pay for such appraiser.’’
In its August 11, 2008 memorandum of decision, the
trial court found that Anderson’s August 22, 2003 fax
to the defendant, in which she stated that the plaintiff
was exercising its purchase option on both properties
and identified Arnold Grant as the plaintiff’s chosen
appraiser, constituted an effective exercise of the plain-
tiff’s purchase options under the lease agreements. That
finding was affirmed on appeal. The court also
expressly rejected the defendant’s claim that the
options expired by their own terms three months after
they were exercised, because ‘‘it was [the defendant’s]
refusal to accept the option[s] that caused the period
to lapse.’’ Put another way, but for the defendant’s repu-
diation of the contracts, the plaintiff would have been
afforded an opportunity to purchase the properties at
their late 2003 appraised values. Consequently, the
court held that ‘‘specific performance of the sale of the
New London and Groton [properties] pursuant to the
terms set forth in the agreements between the parties
is the appropriate remedy in this matter.’’ (Emphasis
added.)
‘‘Specific performance is an equitable remedy permit-
ting courts to compel the performance of contracts for
the sale of real property, and certain other contracts,
pursuant to the principles of equity.’’ (Emphasis added;
internal quotation marks omitted.) Landmark Invest-
ment Group, LLC v. Chung Family Realty Partnership,
LLC, supra, 125 Conn. App. 695. ‘‘[T]he primary purpose
of a decree of specific performance, which is always
an equitable remedy, is to place an injured purchaser
of property in a position that replicates, as nearly as
possible, that which it would have enjoyed but for the
vendor’s unexcused breach.’’ State v. Lex Associates,
248 Conn. 612, 631, 730 A.2d 38 (1999).
‘‘As a general rule, equity, in deciding whether to
grant specific performance in enforcing a contract, will
consider the fairness of an agreement in accordance
with the circumstances as they existed at the time of
the execution of the contract even though the property
contracted to be sold becomes considerably more valu-
able at the time performance is due.’’ Robert Lawrence
Associates, Inc. v. Del Vecchio, 178 Conn. 1, 19, 420
A.2d 1142 (1979); see Texaco, Inc. v. Golart, 206 Conn.
454, 462–63, 538 A.2d 1017 (1988); Battalino v. Van
Patten, 100 Conn. App. 155, 158 n.3, 917 A.2d 595, cert.
denied, 282 Conn. 924, 925 A.2d 1102 (2007).
Thus, the court’s decree of specific performance
should have compelled the defendant’s performance of
the purchase options under the agreements and should
have put the plaintiff in the position it would have been
but for the defendant’s breach. The court, therefore,
should have turned to the language of the parties’ agree-
ments and applied that language to the situation of the
parties as it existed when the defendant repudiated the
plaintiff’s properly exercised options. According to the
unambiguous terms of § 10 (d) of the management
agreements, once the plaintiff exercised its options,
which it did on August 22, 2003, the closings of the
plaintiff’s purchases of the properties were to take place
within three months, or by November 22, 2003. Thus,
under the parties’ agreements, the plaintiff was entitled
to purchase the properties at their appraised values no
later than that date.16 Any alternative outcome, includ-
ing the one ordered by the court, is inconsistent with
the unambiguous terms of the contracts at the time
they were executed.
The court’s present day valuation deprives the plain-
tiff of the benefit of its bargain while giving a significant
windfall to the defendant—the breaching party. The
defendant has cited no authority, nor are we aware
of any, that suggests that a lessor can benefit from a
property’s increase in value after its unexcused breach
of a lease option. In fact, after a review of the contracts
in the context of their execution in 2002, we are con-
vinced to the contrary. ‘‘Otherwise, any lessor who
regretted the terms of an option contract could disre-
gard the exercise of the option and continue to collect
rents until the end of the lease. In other words, the
defaulting lessor could reap an economic gain from
its own misconduct.’’ (Emphasis added.) State v. Lex
Associates, supra, 248 Conn. 622.
Accordingly, we conclude that the court erred in fash-
ioning a specific performance remedy that was contrary
to the terms of the purchase options. Having concluded
that the plaintiff was entitled to the remedy of specific
performance of the agreements, the court, in accor-
dance with the unambiguous language of those agree-
ments, was required to order that the purchase prices
of the properties be based on the appraised values of
the properties as of November 22, 2003.17
II
The plaintiff next claims that it became the equitable
owner of the Groton and New London properties when
it exercised its options. Consequently, the plaintiff
maintains that the court erred when it ordered the plain-
tiff to make rent and use and occupancy payments and
when it concluded that such payments made by the
plaintiff to the defendant after it exercised its purchase
options should not be credited against the purchase
prices of the properties. We agree.
The following additional facts are relevant to our
resolution of the plaintiff’s second claim. On November
19, 2014, the defendant filed a motion requesting that
the court order the plaintiff to make use and occupancy
payments for its continued use of the Groton property.18
In his motion, the defendant argued that because the
plaintiff had made use and occupancy payments from
the time its lease term expired in July, 201219 until June
1, 2014, its continued business operations on the prem-
ises entitled the defendant to those payments as a mat-
ter of equity.20 On January 22, 2015, the plaintiff filed
an objection to the defendant’s motion, arguing that it
became the equitable owner of the properties in August,
2003, thereby excusing it from any obligation to make
rental payments to the defendant. In its May 27, 2016
order ruling on the defendant’s motion, the court stated:
‘‘While the plaintiff may be correct that it no longer has
an obligation to make rental payments . . . it does not
necessarily follow that it is not obligated to make use
and occupancy payments. It has enjoyed possession of
the property since it attempted to exercise the option
in 2003 and to allow it to do so for free would be
inequitable.’’ The court concluded that the plaintiff was
liable to the defendant for use and occupancy payments
of $5000 per month retroactive to June 1, 2014 through
the present. The plaintiff has complied with the court’s
order and has made use and occupancy payments
through the present day. Furthermore, in its order of
July 6, 2015, the court held that ‘‘[n]one of the payments
made by the plaintiff since its exercise of the option
count toward the purchase price.’’
We begin by setting forth the applicable standard
of review. Although we review a court’s decision on
whether to issue a decree of specific performance under
the abuse of discretion standard; see Hill v. Raffone,
103 Conn. App. 737, 742, 930 A.2d 788 (2007); we afford
plenary review to the present claim because the struc-
ture and terms of the court’s equitable remedy were
based on an interpretation of law. See Horner v. Bag-
nell, 324 Conn. 695, 708, 154 A.3d 975 (2017) (applying
plenary review to question of whether plaintiff was
entitled, as matter of law, to award of unjust enrich-
ment). Moreover, whether an equitable remedy is avail-
able in any particular case is a question of law subject
to plenary review. Ed Lally & Associates, Inc. v.
DSBNC, LLC, 145 Conn. App. 718, 735, 78 A.3d 148, cert.
denied, 310 Conn. 958, 82 A.3d 626 (2013). Therefore,
the question of whether the court was precluded from
ordering use and occupancy payments and not crediting
any such payments against the purchase prices of the
properties because the plaintiff was the equitable owner
of the properties after it exercised its options to pur-
chase them is a legal one subject to plenary review.
The law pertaining to option contracts and equitable
conversion is well established. ‘‘[E]quitable conversion
is a settled principle under which a contract for the
sale of land vests equitable title in the [buyer]. . . .
Under the doctrine of equitable conversion . . . the
purchaser of land under an executory contract is
regarded as the owner, subject to the vendor’s lien for
the unpaid purchase price, and the vendor holds the
legal title in trust for the purchaser. . . . The vendor’s
interest thereafter in equity is in the unpaid purchase
price, and is treated as personalty . . . while the pur-
chaser’s interest is in the land and is treated as realty.
. . . The doctrine is a legal fiction, rooted in the princi-
ple that equity views a transaction as being completed
at the time the parties enter into the transaction, irre-
spective of whether a formal exchange of legal title
has taken place.’’ (Citations omitted; emphasis added;
internal quotation marks omitted.) Salce v. Wolczek, 314
Conn. 675, 687–88, 104 A.3d 694 (2014).
‘‘[A]n option to purchase . . . operates as a continu-
ing offer to sell, irrevocable until the expiration of the
time period fixed by the agreement of the parties, which
creates in the option holder the power to form a binding
contract by accepting the offer. . . . When a tenant
exercises an option to purchase the leased premises, a
new bilateral contract is created.’’ (Citation omitted;
internal question marks omitted.) Howard-Arnold, Inc.
v. T.N.T. Realty, Inc., supra, 315 Conn. 602–603.
‘‘If such a lessor refuses proper tender of payment,
a likely result . . . is that the former lessee and present
equitable owner will remain in possession of the prop-
erty pending the rendering of a judgment of specific
performance. . . . [A] person who validly exercises an
option and properly tenders the option price has duly
performed all of the conditions to be performed on its
part, and as of that date became the equitable owner
of the property. [In such a circumstance] an equitable
owner of the real property [has] no further obligations
to make rental payments.’’ (Internal quotation marks
omitted.) Bayer v. Showmotion, Inc., 292 Conn. 381,
401, 973 A.2d 1229 (2009).
Once a lessee becomes the equitable owner of the
property, ‘‘[i]ts ownership rights superseded and
replaced its former leasehold obligations. That result
follows from the logic of the situation. A lessor cannot
retain a continued right to lease payments when those
payments were made subsequent to the lessor’s unex-
cused refusal to accept a proper tender of payment in
full.21 Otherwise, any lessor who regretted the terms of
an option contract could disregard the exercise of the
option and continue to collect rents until the end of
the lease. In other words, the defaulting lessor could
reap an economic gain from its own misconduct.’’
(Footnote added.) State v. Lex Associates, supra, 248
Conn. 621–22.
The plaintiff contends that it was not obligated to
make use and occupancy payments on the Groton and
New London properties because it became the equitable
owner of the properties after it exercised its options
in August, 2003. The defendant first maintains that equi-
table conversion is inapplicable in this case for three
procedural reasons, none of which is persuasive given
the record and the relevant case law. Specifically, the
defendant argues that equitable conversion is inapplica-
ble because the plaintiff (1) failed to plead the doctrine
in its complaint, (2) admitted it had an obligation to
pay rent, and (3) did not appeal from the court’s August,
2008 order of specific performance.
The defendant’s first argument is misplaced because
equitable conversion is not a separate cause of action
but, rather, a result that arises out of a successful claim
for specific performance. See Southport Congrega-
tional Church–United Church of Christ v. Hadley, 320
Conn. 103, 112, 128 A.3d 478 (2016) (‘‘The basis of [equi-
table conversion] is the existence of a duty. . . .
[T]here must, in fact, be a clear duty on the part of the
seller to convey the property, a duty enforceable by an
action for specific performance. . . . The doctrine is
firmly linked to the specific enforceability of the con-
tract.’’ (Internal quotation marks omitted.)). Therefore,
the defendant’s argument that equitable conversion
does not apply to the present case because the plaintiff
neglected to plead it fails.
The defendant’s second argument also lacks merit.
The plaintiff’s acknowledgment that it continued to pay
rent after it exercised its options, as required under
the terms of the lease, does not constitute a judicial
admission on behalf of the plaintiff that it was obligated
to make rental and use and occupancy payments. Judi-
cial admissions are voluntary and knowing concessions
of fact, not law. See Borrelli v. Zoning Board of Appeals,
106 Conn. App. 266, 271, 941 A.2d 966 (2008). The plain-
tiff’s statements that it continued to make payments to
the defendant is a judicial admission of the fact of those
payments. The plaintiff’s characterization of those pay-
ments as rent or use and occupancy, however, is a legal
conclusion that is not binding on this court.
The defendant’s third argument ignores this case’s
extensive procedural history. The court ordered spe-
cific performance after determining that the plaintiff
exercised its options and the defendant thwarted per-
formance by repudiating the contract. It was not until
the court’s final judgments, dated January 22, 2018, that
the plaintiff was able to file the present appeals. The
defendant’s argument lacks any sound basis in law and
fact because (1) the plaintiff was precluded from
appealing any of the court’s orders of specific perfor-
mance; see footnote 9 of this opinion; and (2) the court’s
final judgment orders relates back to its previous
orders, including its orders of specific performance.
Finally, any argument that the plaintiff needed to appeal
the court’s August, 2008 judgments to preserve its equi-
table conversion remedy is misguided because the
plaintiff was not aggrieved by the court’s 2008 judg-
ments, which granted the plaintiff the remedy of spe-
cific performance. It did not state how the remedy
would be implemented, and the plaintiff had no reason
to expect that the court would subsequently issue
orders that were inconsistent with the plaintiff’s rights
under the parties’ contracts. The plaintiff became
aggrieved only when the trial court, on remand, issued
such orders, from which the plaintiff timely appealed. In
addition, as noted previously in this opinion, equitable
conversion is not a separate remedy that needs to be
sought, but is, instead, the logical result of an award
of specific performance of a contract for the sale of
real property.
We turn now to the defendant’s substantive argu-
ments that (1) a proper balancing of the equities favors
the trial court’s determination that the plaintiff is
required to make use and occupancy payments retroac-
tive to June, 2014, (2) the failure of the parties to deter-
mine a purchase price for the properties precludes the
application of equitable conversion, (3) Connecticut
law requires that the plaintiff tender the purchase price
before equitable conversion can apply, and (4) Connect-
icut law requires a showing of bad faith in order for
equitable conversion to apply. We disagree with all of
the defendant’s arguments and address each in turn.
A
The defendant contends that principles of equity
favor the trial court’s determination that the plaintiff
should be required to make use and occupancy pay-
ments, and the application of equitable conversion
would achieve an unjust result. We are not persuaded.
The defendant’s argument is based on the faulty
premise that specific performance and equitable con-
version are separate and distinct remedies; essentially,
that it is possible to order specific performance of a
contract for the sale of property and at the same time
order that the purchaser under the contract is not yet
the equitable owner of the property. This argument
misses the fact that equitable conversion is not a sepa-
rate remedy but, rather, is the legal effect of an enforce-
able contract to purchase property, and, by extension,
an order that such a contract must be specifically per-
formed. As our Supreme Court stated in Lex Associates,
the conclusion that a lessee who exercises an option
to purchase the leased property becomes the equitable
owner of the property ‘‘follows from the logic of the
situation.’’ State v. Lex Associates, supra, 248 Conn.
621.
Consequently, once the court rendered judgments of
specific performance, there were no equities to balance
as to whether the plaintiff became the equitable owner
of the properties. Its status as the equitable owner of
the properties was just a legal and logical reality that
resulted from the parties’ agreements and the court’s
specific performance decree. See also Southport Con-
gregational Church–United Church of Christ v. Had-
ley, supra, 320 Conn. 111 (‘‘The foundation for the doc-
trine of equitable conversion is [the] presumed intention
of the owner, equity regarding as done that which ought
to be done. . . . The doctrine was adopted for the pur-
pose of carrying into effect, in spite of legal obstacles,
the supposed intent of a testator or settlor.’’ (Citation
omitted; emphasis added; internal quotation marks
omitted.)).
Accordingly, we reject the defendant’s contention
that a balancing of the equities requires that the plaintiff
make use and occupancy payments.
B
The defendant next argues that equitable conversion
should not apply because the parties did not determine
purchase prices for the properties. In his appellate brief,
the defendant correctly states that equitable conversion
does not apply when the seller’s duty to convey title
is subject to a condition precedent. By arguing that
completing the appraisal process was a condition prece-
dent to the application of equitable conversion in the
present case, however, the defendant misinterprets the
terms of the purchase options and ignores the trial
court’s determination that the plaintiff strictly complied
with those terms.
‘‘A condition precedent is a fact or event which the
parties intend must exist or take place before there is
a right to performance. . . . When the seller’s duty to
convey title is conditional, and does not arise at execu-
tion, the buyer cannot immediately enforce the con-
tract.’’ (Citation omitted; internal quotation marks omit-
ted.) Id., 113.
In its August, 2008 memorandum of decision, the
court stated that a party to a contract must comply
strictly with the terms of an option clause in order to
exercise it. See Bayer v. Showmotion, Inc., supra, 292
Conn. 409 (‘‘[t]o be effective, an acceptance of an offer
under an option contract must be unequivocal, uncondi-
tional, and in exact accord with the terms of the
option’’). The court also noted that the option clauses
only required that the lessee, subject to its compliance
with the terms and conditions of the leases (1) give
notice of its exercise to the lessor in writing, and (2) give
the lessor three months advance notice. The plaintiff
strictly complied with both requirements, thereby exer-
cising its options. In doing so, equitable title passed
to the plaintiff because the contract did not condition
exercise of the options on completion of the appraisal
process. Put another way, the terms of the purchase
options establish that the defendant’s duty to convey
title to the plaintiff arose at the moment the plaintiff
gave written notice of its intent to exercise its options,
not when the parties established purchase prices.
The defendant’s argument to the contrary is essen-
tially the same as its argument discussed previously in
this opinion that the plaintiff’s options expired by their
own terms three months after they were exercised
because the parties had not completed the appraisal
process. The trial court rejected this argument because
it was the defendant’s unexcused repudiation of the
contracts that prevented completion of the appraisal
process and the transfer of the properties to the plain-
tiff. The same analysis applies to this variation of that
argument. The defendant cannot use his unexcused
breach of the parties’ agreements to prevent the equita-
ble conversion of the properties to the plaintiff. In fact,
permitting him to do so would be decidedly inequitable.
Accordingly, we reject the defendant’s contention
that the parties needed to complete the appraisal pro-
cess and to have established a purchase price for each
property in order for equitable title to pass to the
plaintiff.
C
The defendant further contends that Connecticut law
requires an optionee to tender the purchase price before
equitable conversion can apply to an option contract. In
support of his argument, the defendant cites to several
cases in which the purchase option at issue expressly
defined the purchase price of the property. The pur-
chase options in the present case, however, only defined
the method by which the parties were to determine the
purchase prices. The narrow issue here, which has not
yet been addressed by our courts, is whether the plain-
tiff was required to tender payment when it exercised
its options, notwithstanding the fact that the parties
had not yet established purchase prices.
In its May 27, 2016 order granting the defendant’s
motion for use and occupancy payments, the trial court
distinguished the facts of Lex Associates from the pres-
ent case, limiting the application of equitable conver-
sion only to instances in which the optionee tenders
the purchase price at the time it exercises its option.
The court instead, analogized the present case to the
circumstances in Powertest Corp. v. Evans, 665 F. Supp.
134 (D. Conn. 1986), concluding that equitable conver-
sion does not apply when the optionee is able to enjoy
the continued use of the property to the detriment of
the lessor, who does not get the benefit of the use of
the purchase price. For the reasons that follow, we
disagree with the court’s narrow application of Lex
Associates as well as its reliance on Powertest Corp.
In Powertest Corp., the plaintiff lessee attempted to
exercise its option to purchase a parcel of property
from the defendants pursuant to the terms of a fixed
price purchase option in the lease. Id., 135. The defen-
dants, after receiving a third party offer to purchase
the property, refused to convey it to the plaintiff,
arguing that the plaintiff had not validly exercised its
option under the terms of the lease. Id., 136. Both parties
filed cross motions for summary judgment seeking
declaratory relief. Id., 135. In addition to its claim that
it validly exercised its purchase option, the plaintiff
also argued that it was entitled to credit toward the
property’s sale price for the rental payments it made
after exercising its option. Id.Clause fifteen of the lease, the subject of the parties’
dispute, contained provisions that set forth two ways
in which the plaintiff could purchase the property. Id.,
136. The first paragraph of clause fifteen granted the
plaintiff a fixed price option to purchase the property
‘‘at any time during the last [thirty] days of the initial
ten year period of this lease and during the last [thirty]
days of any extension thereof, for the sum of $50,000.
Such option may be exercised by written notice from
[the plaintiff] to [the defendants] to that effect. . . .
[The plaintiff] shall tender the purchase price to [the
defendants] and [the defendants] at the time of such
tender shall deliver to [the plaintiff] a full covenant and
warranty deed conveying said premises . . . thereon
to [the plaintiff] . . . .’’ (Emphasis added.) Id.The second paragraph of clause fifteen granted the
plaintiff a right of first refusal. Id. The provision stated
in relevant part: ‘‘Without prejudice to the foregoing
option, [the plaintiff shall have the pre-emptive right
during the term of this lease or any extension thereof
to purchase said premises . . . owned by [the defen-
dants] on the same terms and conditions as those of
any bona fide offer received by and acceptable to [the
defendants] and [the defendants] before making any
such sale or any agreement to sell, shall notify [the
plaintiff] in writing of such terms and conditions. [The
plaintiff] within sixty days after receipt of such notice,
may exercise this pre-emptive right by written notice
to [the defendants] to that effect.’’ Id.After notifying the plaintiff of a third party’s offer
to purchase the property for $400,000, the defendants
argued that the fixed price option was extinguished and
the plaintiff could only purchase the property on the
same terms and conditions as the third party’s offer. Id.,
137. The court rejected the defendants’ interpretation of
the purchase option, noting that ‘‘the ‘without prejudice’
language used in the lease before this court appears to
subordinate the right of first refusal to [the] plaintiff’s
rights under the [fixed price] option.’’ Id., 138. The court
relied on the principle that ‘‘purchase options in leases
are normally inserted for the benefit of the lessee and
should be interpreted in light of this purpose’’ and con-
cluded that the defendants’ interpretation of clause fif-
teen would nullify the plaintiff’s benefit under the fixed
price option, particularly in light of the unambiguous
language of the lease. Id.Having granted the plaintiff’s motion for summary
judgment as to the valid exercise of the fixed price
option, the court was left with the plaintiff’s claim that
it was entitled to credit toward the purchase price for
rental payments it made thereafter. Id., 141. The court
rejected the plaintiff’s claim, stating that ‘‘these rental
payments are economically similar to interest payable
on the unpaid principal of a mortgage. The plaintiff
has not yet paid the amount of this principal and the
defendants have not had the benefit of the use of the
funds. Because the plaintiff has been able to enjoy the
continued use of the property without having to part
with the [$50,000] purchase price, there is no reason
to allow [the] plaintiff to receive credit for the amounts
paid in rent since its attempt to exercise its [fixed price]
option.’’ Id.The trial court’s reliance on Powertest Corp. to reach
its conclusion in the present case ignores the critical
differences in the lease terms at issue. Most notably,
the purchase option in Powertest Corp. explicitly stated
that the purchase price of the property was $50,000.
Conversely, the purchase options in the present case
did not articulate purchase prices for the Groton and
New London properties but, instead, provided only that
the prices would be determined through an appraisal
process. Like the plaintiff in Powertest Corp., the plain-
tiff in the present case validly exercised its options by
way of written notice to the defendant. The important
distinction, however, is that the plaintiff in the present
case was never afforded an opportunity to tender the
purchase prices because of the defendant’s refusal to
participate in the appraisal process. In fact, it was his
own improper repudiation of the contract that deprived
the defendant of the benefit of the use of the purchase
price funds, not the plaintiff’s inaction. Were we to
apply the court’s analysis in Powertest Corp. to the
present case, we would effectively reward the defen-
dant for his breach. Furthermore, the court in Powertest
Corp. did not discuss the doctrine of equitable conver-
sion. Instead, it reached its conclusion by equating the
plaintiff’s rental payments to interest payments on a
mortgage and the option payment to the principal of
the mortgage. Regardless of whether such an approach
was appropriate given the specific facts of Powertest
Corp., our Supreme Court made clear in Lex Associates
that a much different analytical framework applies to
a lessor’s repudiation of the lessee’s exercise of its
purchase option. We apply that framework in this case.
In Lex Associates, the plaintiff exercised its option to
buy property that it had been leasing from the defendant
and tendered the purchase price at the closing in accor-
dance with the terms of the purchase option. State v.
Lex Associates, supra, 248 Conn. 616. The defendant
rejected the plaintiff’s tender, and the plaintiff promptly
filed an action for specific performance. Id. During the
pendency of the case, the plaintiff continued to make
rental payments to the defendant, eventually exceeding
the purchase price of the property.22 Id. The plaintiff
argued that the excess payments were a setoff against
the purchase price, while the defendant claimed that
the payments simply were rent owed to it due to the
plaintiff’s continued use of the property pendente lite.
The trial court granted the plaintiff’s motion for sum-
mary judgment and allocated the pendente lite pay-
ments to the plaintiff as a setoff to the purchase price.
Id. The court, however, awarded damages to the defen-
dant in the form of interest on the purchase price. Id.On appeal, our Supreme Court affirmed the judgments
of the trial court as to the plaintiff’s setoff but reversed
as to the defendant’s award of interest. Id., 617.
In Lex Associates, our Supreme Court determined
that, after exercising its option and becoming the equita-
ble owner of the property, the plaintiff’s ‘‘ownership
rights superseded and replaced its former leasehold
obligations.’’ Id., 621. The court further stated: ‘‘Under
the circumstances of the present case, therefore, we
agree with the [plaintiff] that the trial court properly
credited the postclosing payments against the purchase
price. The [plaintiff] kept its tender open. . . . The
[plaintiff’s] pendente lite payments to [the defendant]
throughout the course of this protracted litigation do
not diminish the rights that accrued to the [plaintiff]
on October 15, 1990, the date of the tender of payment.
Having demonstrated its right to specific performance
of [the defendant’s] promise to convey title, the [plain-
tiff] had a right to be placed, as nearly as practicable,
in the same position as if [the defendant] had performed
its contract obligations in timely fashion. . . . But for
[the defendant’s] unexcused refusal to convey title on
October 15, 1990, [the defendant] would have had no
possible claim to further payments from the [plaintiff].
[The defendant’s] own breach of contract cannot entitle
it to keep such payments now. . . .
‘‘In sum, because [the defendant’s] unexcused refusal
to accept the [plaintiff’s] tender of full payment on
October 15, 1990 was a material breach of a valid lease
contract, [the defendant] cannot recover as rents any
payments to which it would not have been entitled
had it honored its contract obligations properly and
promptly.’’ (Citations omitted; emphasis added; inter-
nal quotation marks omitted.) Id., 625.
As previously stated in this opinion, in the present
case, both the trial court and our Supreme Court deter-
mined that the plaintiff fully complied with the terms
of the lease options, despite never having completed
the appraisal process. The defendant’s argument that
the plaintiff should have tendered payment for the prop-
erties when it exercised its options is misguided for
two reasons. First, the defendant’s argument asks us
to insert a condition precedent in the purchase options
that does not exist. In Lex Associates, the tender of the
purchase price was required in order to exercise the
purchase option. Such tender was not required in this
case. Again, the option terms only required the plaintiff
to give the defendant three months advance notice, in
writing, of its exercise of its options. Once the plaintiff
fully complied with those terms, a contract was formed
and equitable title passed from the defendant to the
plaintiff. See Salce v. Wolczek, supra, 314 Conn. 688.
There were no conditions in the lease regarding the
amount that the plaintiff was required to tender or the
manner in which the plaintiff was required to tender
payment. To the contrary, the options contemplated
future payment after completion of the appraisal pro-
cess, which necessarily requires us to conclude that
the plaintiff was under no obligation to tender undeter-
mined purchase prices at the time it exercised its
options.
Second, the defendant ignores the fact that he pre-
cluded the plaintiff from tendering payment by repudiat-
ing the contract and refusing to proceed with the
appraisal process. After years of delay and protracted
litigation, the defendant now argues that the plaintiff
cannot invoke its right to equitable title because the
plaintiff failed to tender the purchase prices that the
defendant prevented it from determining. Were this
court to accept the defendant’s argument, any lessor
of property could frustrate a lease’s purchase option
by refusing to perform an obligation necessary to enable
the lessee to tender the purchase price. Put another
way, a lessor could foreclose a lessee from exercising
its option to purchase the property in favor of continued
rent payments through the expiration of the lease. Such
a conclusion is inconsistent with general principles of
equity and contract law.23
Accordingly, given the specific facts of this case, we
reject the defendant’s contention that equitable title to
the properties did not pass to the plaintiff because the
plaintiff did not tender payment when it exercised its
options.
D
The defendant also argues that Connecticut law
requires a showing of bad faith on the part of the
breaching lessor in order for equitable title to vest in the
purchaser. In support of this contention, the defendant
cites to Heyman v. CBS, Inc., 178 Conn. 215, 217, 423
A.2d 887 (1979), and State v. Lex Associates, supra, 248
Conn. 616, neither of which supports his argument. In
Heyman, the defendant exercised its option to pur-
chase the subject property and the plaintiffs refused to
convey, arguing that the option clause was unenforce-
able because of the statute of frauds. See Heyman v.
CBS, Inc., supra, 178 Conn. 217. Our Supreme Court
rejected the plaintiffs’ argument, concluding that the
defendant exercised its option and became the equita-
ble owner of the property when it tendered payment
in accordance with the conditions of the option clause.
Id., 220.
In Lex Associates, the defendant refused to convey
the property at closing and argued on appeal that the
purchase option was unenforceable because it was not
supported by adequate consideration due to an alleged
lack of mutuality of obligation. See State v. Lex Associ-
ates, supra, 248 Conn. 617. Our Supreme Court rejected
the defendant’s argument, concluding that the plaintiff
was relieved of its rental obligations when it exercised
its option and tendered payment in accordance with
the lease terms. Id., 624–25.
The defendant maintains that both Heyman and Lex
Associates stand for the proposition that equitable con-
version is applicable only when a lessor or vendor
breaches in bad faith. We are not persuaded. Like the
defendant in the present case, the vendors in Heyman
and Lex Associates did not refuse to convey the proper-
ties in bad faith. In fact, our Supreme Court makes no
mention of bad faith in either case.
The defendant in the present case repudiated the
contract on the basis of his mistaken belief that the
plaintiff had not validly exercised its options. Our
Supreme Court determined that the defendant’s good
faith refusal to convey the properties, like the vendors
in Heyman and Lex Associates, was ultimately an unex-
cused breach of the lease options. The nature of the
breach did not affect our Supreme Court’s analysis in
either Heyman or Lex Associates, nor does it affect
ours in the present case.
Accordingly, we reject the defendant’s contention
that Connecticut law requires a showing of bad faith
for equitable conversion to apply.
We, therefore, conclude that the plaintiff’s lessee obli-
gations terminated when it exercised its options and
became the equitable owner of the properties. Conse-
quently, the trial court erred by ordering that the plain-
tiff make rent and use and occupancy payments and
by refusing to credit any such payments against the
purchase prices the plaintiff was required to pay for
the properties.
III
The plaintiff’s final claim is that the logical conclusion
that flows from its right to credits against the purchase
prices of the properties for any payments it made after
it exercised its options is that it is entitled to a refund
from the defendant to the extent that those payments
exceeded the purchase prices of the properties. Con-
versely, the defendant argues that the plaintiff’s mistake
of law in paying rent and use and occupancy does not
entitle it to an award of damages. Additionally, the
defendant contends, for the first time on appeal, that
the plaintiff owes interest on the purchase prices. The
plaintiff argues that the defendant’s claim for interest
is improper because he never requested interest from
the trial court and because the equities do not support
such an award. We agree with the plaintiff on both
damages and interest.
A
Because the trial court concluded that the plaintiff
was not entitled to credit any rent or use and occupancy
payments against the purchase prices of the properties,
it never addressed the question of whether the plaintiff
was entitled to an award of damages if such payments
were greater than the total of the purchase prices. Nev-
ertheless, we resolve the issue because it is purely a
question of law that flows from our conclusion that the
plaintiff became the equitable owner of the properties
upon the exercise of its purchase options on August
22, 2003.
Our Supreme Court’s analysis in Lex Associates
informs our conclusion that the plaintiff is entitled to
an award of damages for payments it made to the defen-
dant in excess of the purchase prices of the properties.
As previously stated in part II C of this opinion, the
plaintiff did not tender full payment of the purchase
prices because it was foreclosed from doing so as a
result of the defendant’s repudiation of the contract.
When it was forced to litigate its right to exercise its
options, the plaintiff, as did the plaintiff in Lex Associ-
ates, continued making payments on both properties
to avoid any claim that it had forfeited its rights to
the properties. Although it eventually ceased making
the premises in 2012, it has continued to make payments
on the Groton property, including from June 1, 2014,
to the present pursuant to the trial court’s order. We
see no logical basis to limit the credit to which the
plaintiff is entitled to the amount of the purchase prices
of the properties. The plaintiff was required to pay the
defendant no more than the purchase prices determined
pursuant to the parties’ agreements, and the defendant
was entitled to receive no more than those amounts.
To the extent that the defendant has received, in total,
more than the purchase prices of the properties, he has
no legal or equitable entitlement to such funds and must
return them.
The defendant attempts to avoid this conclusion by
arguing that he is not responsible for the plaintiff’s
mistake of law in voluntarily continuing to make rent
and use and occupancy payments to the defendant after
the plaintiff exercised its options. We find this argument
unavailing for two reasons. First, not all of the payments
made by the plaintiff for which it seeks credit were
made voluntarily. In reliance on our Supreme Court’s
decision in this case, the plaintiff stopped making
monthly payments on the Groton property as of June
1, 2014. See footnote 8 of this opinion. Thereafter, in
response to the defendant’s motion for continued use
and occupancy payments, the trial court ordered that
the plaintiff make monthly use and occupancy pay-
ments on that property, retroactive to June 1, 2014.
Thus, payments since June 1, 2014, were in no way
voluntary. For the defendant to suggest that such court
ordered payments were the result of the plaintiff’s own
mistake of law is without merit.
Second, the defendant’s argument would mean that
the plaintiff’s entitlement to damages turns entirely on
the label assigned to its payments, thus elevating form
over substance. As stated previously in this opinion, the
plaintiff’s characterization of its continued payments
to the defendant as rent or use and occupancy is a legal
conclusion—not a judicial admission—which is not
binding on this court. Our analysis is guided by the fact
that the plaintiff, despite being the equitable owner
of the properties, continued to make payments to the
defendant until May, 2014, in an effort to preserve its
property rights. Once our Supreme Court determined
that the plaintiff did, in fact, validly exercise its pur-
chase options, it ceased making payments in accor-
dance with its ownership rights. The fact that the defen-
dant had no right to continued payments after the
plaintiff exercised its options in August, 2003, turns on
the legal conclusion that the plaintiff, at that point,
became the equitable owner of the properties.24 The
same is true of the plaintiff’s right to a return of any
overpayments it made.
Accordingly, we agree with the plaintiff that, to the
extent that the payments it has made since exercising
its options exceeded the determined purchase prices
of the properties, the plaintiff is entitled to an award
of damages equaling the amount of the overpayment.
B
The defendant also claims that if we determine that
the purchase prices of the properties should be deter-
mined based on their November, 2003 appraised values,
he is entitled to interest on the purchase prices. We
reject the defendant’s claim for two reasons. First, the
defendant is raising this issue for the first time on appeal
and, therefore, we are under no obligation to consider
it. See Guddo v. Guddo, 185 Conn. App. 283, 286–87,
196 A.3d 1246 (2018). Second, our Supreme Court con-
sidered and rejected a virtually identical claim in Lex
Associates.
In Lex Associates, our Supreme Court noted that a
necessary predicate of an award of prejudgment inter-
est is a determination that the party against whom inter-
est is to be awarded has wrongfully detained money
owed to the aggrieved party. State v. Lex Associates,
supra, 248 Conn. 628. Notwithstanding the trial court’s
determination that the plaintiff’s tender of the full pur-
chase price demonstrated that it did not wrongfully
detain money owed to the defendant, the court still
ordered that the plaintiff pay prejudgment interest. Id.In reversing the trial court, our Supreme Court stated:
‘‘In the absence of any wrongdoing by the [plaintiff],
the best that can be said for [the defendant] is that it
entertained a good faith but mistaken belief that the
option contained in the lease was unenforceable. [The
defendant’s] mistake does not provide an equitable
basis for an award of interest to it as compensation for
its own delay in conveying title to the [plaintiff]. . . .
‘‘It is true that, even though the [plaintiff] did not
wrongfully withhold the purchase price from [the defen-
dant], a tender of payment is not the equivalent of pay-
ment itself. Refusal of a tender of payment, however,
while it does not discharge a debt, discharges any fur-
ther accrual of interest if the purchase keeps the tender
good pendente lite.’’ (Emphasis added.) Id., 629.
Although the plaintiff in the present case did not
tender payment when it exercised its options, the
options did not require that it do so. Furthermore, the
defendant’s mistaken belief that the options were unen-
forceable is what caused the delay in conveying title
to the plaintiff. The same logic that our Supreme Court
applied in Lex Associates applies here. The plaintiff
made every effort to close on the properties pursuant
to the terms of the options and the defendant wrongfully
prevented that from coming to fruition.25
Accordingly, we reject the defendant’s contention
that he should receive interest on the purchase price
of the properties.
IV
Finally, we turn to the defendant’s cross appeal. On
appeal, the defendant claims that the parties agreed to
an appraiser, Robert Silverstein, for the valuation of
the Groton property and, in accordance with the terms
of the purchase option for that property, Silverstein’s
valuation should determine its purchase price. The
defendant argues that the court erred by averaging the
appraisals of Silverstein and the plaintiff’s appraiser,
Grant. For the reasons that follow, we reject the defen-
dant’s claim.
Before addressing the merits of the defendant’s claim,
we set forth the applicable standard of review, which
the defendant asserts is plenary because his cross
appeal involves an issue of contract interpretation. The
defendant is mistaken, however, as the issue he raises
is one concerning the trial court’s conclusion as a matter
of fact that the parties did not agree to a mutually
acceptable appraiser. Although the defendant contends
that the trial court erred by failing to use only Sil-
verstein’s appraisal, as purportedly required by the pur-
chase option, the defendant is actually challenging the
court’s implicit factual finding that the parties never
reached an agreement to use only Silverstein’s
appraisal.26 Therefore, our standard of review is clearly
erroneous. See Valley National Bank v. Marcano, 174
Conn. App. 206, 217, 166 A.3d 80 (2017).
The following additional facts and procedural history
are relevant to our resolution of the defendant’s claim.
On June 24, 2008, at trial, the defendant cross-examined
the plaintiff’s vice president, Anderson, on her negotia-
tions with the defendant, the appraisal process, and
Silverstein’s appraisals of the Groton and Westerly,
Rhode Island properties.27 When asked on cross-exami-
nation if the plaintiff agreed that it would purchase the
Groton and Westerly properties in accordance with the
Silverstein appraisal, Anderson replied ‘‘no.’’ Anderson
further testified that ‘‘[t]he reason we did . . . Sil-
verstein’s appraisal was after our offer—I realized that
I couldn’t force [the defendant] to take an appraisal,
and I offered to pay—for him to select a MAI appraiser,
and I was going to pay for the appraiser, and so—I did
so. So, I paid for . . . Silverstein’s appraisal, and I was
expecting to average [it with Grant’s appraisal] and
proceed with the purchase of the Groton real estate.’’
She also testified that ‘‘[t]he price was not to be set
by . . . Silverstein. The price was going to be set by
both appraisals.’’
On July 2, 2008, at trial, the defendant also testified
as to the parties’ contract negotiations and the appraisal
process. He testified that, in either late 2005 or early
2006, he and Anderson agreed that he would sell the
Groton property to the plaintiff based on Silverstein’s
appraisal. He testified though, that any such sale was
to be made outside the option process. In particular,
when asked about his obligations under the purchase
options on cross-examination, the defendant testified
that ‘‘I made it clear to . . . Anderson . . . every sin-
gle time I talked to them after 2003 that if we talked
about selling any of these properties it would not be
under the option. The option was done, it was complete;
it was kaput. I made that perfectly clear, and we pro-
ceeded with the Westerly purchase on that basis, and
it wasn’t done under the options . . . it even says it in
there that it is not done under the options.’’ The defen-
dant offered no other evidence at trial that the plaintiff
agreed that Silverstein was to be the sole appraiser on
the plaintiff’s exercise of its option to purchase the
Groton property.
After the case was remanded to the trial court, follow-
ing our Supreme Court’s May 20, 2014 decision, the
defendant, on May 18, 2015, filed a postappeal trial
memorandum regarding his position in light of the
remand. In that memorandum, the defendant stated, as
fact, that ‘‘[a]s part of the negotiating for the sale of
the Westerly real property, on January 25, 2005, Ander-
son, at the suggestion of Cushman, proposed in writing
that . . . Silverstein also be the mutually acceptable
appraiser for the Groton and New London real proper-
ties. In that written proposal Anderson also stated that
she would close on Groton within [two] months after
receiving the Silverstein appraisal for Groton. (Pro-
posed [e]xhibits 31 through 31G, series of [e-mails]
between Paulina Anderson and Cushman (ARCO
Corp.), dated 25 to 26 January 2005, respectively).’’ The
defendant, referring to additional ‘‘proposed exhibits,’’
also represented that Anderson had engaged Silverstein
to appraise the Groton property, and that Silverstein
had appraised the property as having a value, as of
February 23, 2005, of $625,000. Despite his reference
to proposed exhibits, the defendant did not attach any
such exhibits to his postappeal trial memorandum. Nor
did he move to open the evidence in the case to intro-
duce these documents. However, in his memorandum
of law dated December 21, 2017, filed in anticipation
of the trial court’s hearing after remand, the defendant,
for the first time, attached copies of alleged e-mails
between Anderson and Cushman, in which Anderson
purportedly proposed that Silverstein act as the parties’
mutually acceptable appraiser for the Groton property.
In his appellate brief before this court, the defendant
argues that the trial court failed to consider Anderson’s
trial testimony and her e-mails with him when it calcu-
lated the purchase price of the Groton property based
on an average of the parties’ appraisals, instead of rely-
ing solely on the Silverstein appraisal. The defendant
maintains that this evidence establishes that the parties
mutually had agreed on an appraiser in accordance with
the Groton lease terms and, therefore, the court abused
its discretion by failing to set the purchase price in
accordance with Silverstein’s appraisal. We disagree.
First, the defendant has mischaracterized Anderson’s
testimony. She testified that she thought Silverstein’s
appraisal would be averaged with Grant’s appraisal.
Thus, it was not clearly erroneous for the court to rely
on an average of the parties’ appraisals when it deter-
mined the purchase price for the Groton property.
Second, the e-mails on which the defendant relies
were never admitted as evidence before the trial court.
‘‘This court is limited in its review to matters contained
within the record. In deciding a case, this court cannot
resort to matters extraneous to the formal record, to
facts which have not been found and which are not
admitted in the pleadings, or to documents or exhibits
which are not part of the record.’’ (Emphasis added.)
Blakeman v. Planning & Zoning Commission, 82
Conn. App. 632, 641 n.8, 846 A.2d 950, cert. denied, 270
Conn. 905, 853 A.2d 521 (2004).
During oral argument before this court, the defendant
conceded that the documentary evidence regarding the
Silverstein appraisal and the plaintiff’s purported accep-
tance of it was not entered into evidence, as it was only
submitted as an attachment to its December 21, 2017
memorandum.28 There is simply no basis for concluding
that the court made an erroneous factual finding based
on documents that were never submitted into evidence.
Accordingly, we conclude that the court did not err in
failing to set the purchase price for the Groton property
at Silverstein’s appraised value.
The judgments are reversed and the cases are
remanded with direction to determine the purchase
prices of the properties as of November 22, 2003, pursu-
ant to the plaintiff’s exercise of its options to purchase
the properties in 2003 and the appraisals submitted by
the parties regarding the values of the properties as of
November 22, 2003, to credit against those purchase
prices any payments made by the plaintiff to the defen-
dant for use of the properties after it exercised its pur-
chase options, and to order the defendant to refund
to the plaintiff the amount of its payments made that
exceeded the purchase prices of the properties.
In this opinion the other judges concurred.
1
The plaintiff commenced the underlying actions by way of two separate
complaints; see Pack 2000, Inc. v. Cushman, Superior Court, judicial district
of New London, Docket No. CV-XX-XXXXXXX-S (July 17, 2006), and Pack 2000,
Inc. v. Cushman, Superior Court, judicial district of New London, Docket
No. CV-XX-XXXXXXX-S (July 17, 2006); seeking specific performance of sepa-
rate lease with option agreements to purchase the Groton and New London
properties, respectively. The trial court consolidated both matters for trial
on June 24 and July 2, 2008.
2
Our Supreme Court determined that (1) a substantial compliance stan-
dard—rather than a strict compliance standard—applies when an option to
purchase property is conditioned on a lessee’s compliance with a lease, (2)
the plaintiff substantially complied with the lease requirements, and (3) the
plaintiff was ready, willing, and able to purchase the properties when it
exercised its options. Pack 2000 v. Cushman, supra, 311 Conn. 662, 680–90.
3
ARCO was not named as a defendant in the present actions and, conse-
quently, is not a party to this consolidated appeal.
4
One of the shops is located in the city of New London and the other is
located in the town of Groton.
5
Specifically, both leases were for two terms of five years each, with the
first term beginning in July, 2002 with an annual rent of $48,000 payable in
monthly installments of $4000. The second term required an annual rent of
$60,000 to be paid in monthly installments of $5000.
6
This payment structure is also known as triple net rent.
7
See footnote 2 of this opinion.
8
According to Grant’s 2003 appraisals, the purchase price for the Groton
and New London properties were $415,000 and $385,000, respectively.
9
On November 30, 2015, the plaintiff attempted to appeal from the court’s
order in each case. This court dismissed the plaintiff’s appeals on January
27, 2016, for lack of a final judgment.
10
In its objection, the defendant also asserted that the parties mutually
agreed to use Robert Silverstein as the appraiser for the Groton and New
London properties, an argument that the defendant first presented to the
trial court on May 15, 2015, in his postappeal trial memorandum. The plaintiff
has, at all times, disputed the defendant’s contention, citing its July 14, 2014
motion for postjudgment orders as evidence that it intended to use Grant
as its appraiser.
11
We note that specific performance is an equitable remedy to be issued
at the discretion of the trial court, and the trial court’s decision whether to
award specific performance is reviewed for an abuse of that discretion.
Landmark Investment Group, LLC v. Chung Family Realty Partnership,
LLC, 125 Conn. App. 678, 695, 10 A.3d 61 (2010), cert. denied, 300 Conn.
914, 13 A.3d 1100 (2011). There is no challenge in this consolidated appeal
to the trial court’s decision to award the plaintiff specific performance.
Consequently, the abuse of discretion standard of review is not implicated.
Instead, the question is whether the court correctly interpreted the parties’
agreements when it crafted its specific performance award. Thus, our stan-
dard of review is plenary.
12
Section 10 (d) of the management agreement provides in relevant part:
‘‘The purchase prices shall be determined by a mutual[ly] acceptable MAI
appraiser. If the parties cannot agree on a single appraisal, then each party
shall appoint an MAI appraiser. The price shall be set by the average of the
appraisals. . . . [The plaintiff] shall give [the defendant] written notice of
its intention to exercise the option three (3) months in advance so that the
appraisals may be performed.’’
13
Section 2 (b) of the Groton lease, which is virtually identical to the
New London lease, provides: ‘‘The purchase price is to be determined by a
mutually acceptable MAI appraiser. If the parties cannot agree on a single
appraisal, then each party shall appoint an MAI appraiser. The price shall
be set by the average of the appraisals. [The plaintiff] shall pay the cost of
the mutually acceptable appraiser or [the plaintiff’s] appraiser. Should [the
defendant] deem it necessary to retain an appraiser, [the defendant] shall
pay for such appraiser.’’
14
Practice Book § 61-11 (a) provides in relevant part: ‘‘Except where
otherwise provided by statute or other law, proceedings to enforce or carry
out the judgment or order shall be automatically stayed until the time to
file an appeal has expired. If an appeal is filed, such proceedings shall be
stayed until the final determination of the cause. . . .’’
15
The court’s May 19, 2015 order in response to the plaintiff’s motion for
clarification was consistent with, and virtually identical to, its July 6, 2015
order requiring the parties to immediately proceed with the appraisal process
based on present day values.
16
See footnote 12 of this opinion.
17
On remand, the court is not required to use only appraisals that exist
as of this date. It may rely also on appraisals subsequently prepared, so
long as the appraisals value the properties as of November 22, 2003. To the
extent that there is a variance in the MAI appraisals submitted by the parties,
the court is required, pursuant to the terms of the leases, to set the purchase
prices of the properties by averaging the appraisals.
18
The defendant did not move for use and occupancy payments with
respect to the New London property because the plaintiff vacated the prem-
ises at the end of its lease term in July, 2012. The plaintiff states on appeal
that it fully reserves the right to acquire legal title to the New London
property pursuant to its option in the lease and management agreement.
19
See footnote 4 of this opinion.
20
Our Supreme Court’s May 20, 2014 decision in Pack 2000, Inc. v. Cush-
man, supra, 311 Conn. 662, prompted the plaintiff to cease making use and
occupancy payments to the defendant.
21
Although the plaintiff did not tender payment to the defendant for the
properties, it was prevented from doing so by the defendant’s unexcused
breach of failing to participate in the appraisal process called for in the
leases. Consequently, given the facts of this case, we reject the defendant’s
contention that, under Bayer and Lex Associates, the plaintiff did not become
the equitable owner of the properties when it exercised its options. See
part II C of this opinion.
22
The purchase price stipulated in the amended lease was $395,000, and
the payments made by the plaintiff totaled $398,142. State v. Lex Associates,
supra, 248 Conn. 616.
23
General principles of contract law establish that an optionee has no
duty to tender all or part of the purchase price at the time it exercises its
option when the contract terms are silent as to the price or the time and
method of tender. See Matrix Properties Corp. v. TAG Investments, 609
N.W.2d 737, 742–43 (N.D. 2000) (‘‘[w]here the exercise of the option to
purchase does not provide for payment of the purchase price coincident
with the optionee’s exercise of the option, the payment of the purchase
price is merely an incident of performance of the bilateral contract created
by the exercise of the option’’); see also Parkway Trailer Sales, Inc. v.
Wooldridge Bros., Inc., 148 Conn. 21, 25, 166 A.2d 710 (1960) (‘‘The lease
itself was silent as to the manner in which the option was to be exercised.
It did not provide that the plaintiff had to pay the purchase price on or
before the expiration of the lease. Rather it conferred a privilege upon the
plaintiff which did not become binding upon any party until the plaintiff
notified the defendants that it was taking up the option. This it did when
its attorney sent the letter of April 17, 1957, to Wooldridge. Thereupon a
binding bilateral contract came into being; it obligated the defendants to
convey title by good and sufficient deed and obligated the plaintiff to accept
the deed and pay the purchase price.’’); annot., 71 A.L.R.3d 1201, § 7 (1976)
(‘‘[i]n those cases in which the courts have been called upon to interpret
option contracts which did not explicitly require the payment of the purchase
price as a condition precedent to exercise of the option . . . the courts
have generally been inclined to construe such agreements as calling simply
for a promise by the optionee to pay the price, rather than for actual payment
thereof, and as looking to formation, through the giving of such promise,
of a bilateral contract of purchase and sale, with performance thereof by
each of the parties to be completed within a reasonable time thereafter’’).
24
In support of his argument that the plaintiff is not entitled to a damage
award for moneys paid voluntarily under a mistake of law, the defendant
cites to Rockwell v. New Departure Mfg. Co., 102 Conn. 255, 128 A. 302(1925). In Rockwell, the trial court held that the defendant employer was
entitled to recover commissions paid to the plaintiff under a mistake of law.
Id., 279. Our Supreme Court reversed, holding that ‘‘when the parties to a
written contract stand on an equal footing as to means of knowledge of their
contract obligations, money paid by one to the other, in part performance
of the contract, in response to a claim made in good faith and based upon a
permissible but erroneous construction of the contract, cannot be recovered
back as money paid under a mistake of law.’’ Id., 308–309. The defendant’s
reliance on Rockwell is misplaced.
In the present case, the plaintiff’s continued rental payments to the defen-
dant did not arise out of the plaintiff’s mistaken interpretation of the parties’
agreements. Nor were they made in part performance of the contract. Rather,
the plaintiff’s continued payments were the product of the defendant’s repu-
diation of the contract. The plaintiff’s payments were no more a mistake
of law than were the plaintiff’s continued payments in Lex Associates.
25
We note also that the defendant’s claim that he has been deprived of
the use of the purchase prices of the properties is somewhat overstated
given that the plaintiff has been paying the defendant monthly since it
exercised its options and may very well have paid the defendant more than
that to which he is entitled for the properties. To the extent that this is the
case, the defendant has enjoyed the use of moneys he had no right to receive.
26
Although the court did not explicitly find that there was no agreement
to use Silverstein, its valuation of the Groton property, based on an average
of the parties’ appraisals, necessarily means that it rejected the defendant’s
claim that the parties had agreed to use Silverstein exclusively.
27
An additional parcel of property located in Westerly, Rhode Island, was
involved in the parties’ contract negotiations but is not at issue in this appeal.
28
During oral argument before this court, counsel for the defendant
described the filing to which the proposed exhibits were attached as a
postappeal motion for further findings. We have been unable to locate any
such filing on the trial court’s docket. Furthermore, the only filing we could
locate to which the proposed exhibits were attached was the defendant’s
December 21, 2017 memorandum. During argument at the December 21,
2017 hearing before the trial court, counsel for the defendant did make
reference to the proposed exhibits by stating that the defendant could ‘‘make
a record’’ that the communications constituted ‘‘business records between
the plaintiff and the defendant.’’ However, there is nothing in the record to
show that the defendant actually moved to open the evidence, or that the
trial court denied such a motion. In any event, it is clear that the proposed
exhibits were never admitted as full exhibits. It is equally clear that the
defendant has not argued in his cross appeal that the trial court erred in
failing to admit into evidence the proposed exhibits.