Opinion
No. CV 98 0168977S
December 17, 2004
Memorandum of Decision
Parties
The plaintiffs are individuals and trustees who are members of or represent the interests of the Kaplan family. They are successors in interest to other members of the same family, including Phillip Kaplan, who acquired certain real property located in Norwalk in 1963. Until his death in 1988, Phillip Kaplan managed the family's interests in the subject property, thereafter his son, Andrew S. Kaplan, assumed management responsibilities on behalf of the family.
The defendants are members of the Discala family who in 1975 acquired property adjacent to the plaintiffs' property or their successors in title. At all relevant times the manager of the defendants' interests has been Michael F. Discala.
Background
The plaintiffs own commercial real estate situated on the south side of Westport Avenue (US Route 1) in the City of Norwalk. Their property has highway frontage of approximately 60 feet and is improved with a one-story building of approximately 6,000 square feet containing three retail stores.
The defendants are owners of contiguous commercial real estate lying to the west of the plaintiffs' property. The defendant's property has highway frontage on Westport Avenue of approximately 430 feet and is presently improved with several contiguous one-story buildings with a total area of approximately 35,000 square feet housing retail tenants.
Both the plaintiffs' property and the defendants' property form a portion of the "Strawberry Hill Shopping Center." Both properties were once part of a larger parcel shown as "Tract A" on Map #5096 on record in the Norwalk Land Records. The controversies between the parties are rooted in a document entitled "Declaration of Restrictions and Covenants" dated July 29, 1957 and recorded in the Norwalk Land Records (the "Declaration"). The declaration was signed by individuals who then owned all of "Tract A" and adjacent property known as "Tract B."
The Declaration refers to Map #5096 and sets forth the plan to develop both "Tract A" and "Tract B" as a community shopping center. On the date of the Declaration "Tract A" was improved with the one-story 6,000 square foot building now owned by the plaintiffs and with a one-story building, approximately 29,300 square foot in area, now owned by the defendants. The footprints of those structures are shown on Map #5096 and are designated thereon as "Completed Area." The Declaration states the intention of the declarants to erect an additional structure on a portion of "Tract A" designed on Map #5096 as "Construction Area." Except for the "Completed Area" and the "Construction Area," the remainder of "Tract A" is shown on Map #5096 with diagonal markings.
No evidence was offered at trial as to the present ownership of the "Construction Area." However the evidence established that the "Construction Area" and the portion of "Tract A" lying north and south of the "Construction Area" is owned by third parties; that to date no structures have been erected on that parcel; and that, for the most part, the property is paved and used for parking.
In relevant part, Paragraph "One" of the Declaration purports to create "a mutual, reciprocal and non-exclusive easement, license, right and privilege of passage and use, both pedestrian and automotive for the purpose or ingress, egress and parking in, to, upon and over that portion of Tract "A" as designated (on Map #5096) by diagonal markings . . ." Paragraph "One" further states that the foregoing rights were created for the benefit of owners or tenants of any portion of "Tract A" or "Tract B."
Paragraph "Four" of the declaration states: "That no additional structures shall be erected on Tract `A' except the proposed building in the Construction Area."
By 1978 the plaintiffs had become the owners of the portion of "Tract A" presently owned by them and the defendants had become the owners of the adjacent portion of "Tract A" which they now own. The portion of "Tract A" lying to the east of the plaintiffs' property and including the "Construction Area" has never been owed by either the plaintiffs or the defendants.
In 1978 the defendants wished to construct an additional building on their property and requested Philip Kaplan to consent to the construction. When Philip Kaplan did not consent, the defendants commenced litigation in Superior Court. In the first count of their complaint the defendants claimed that the plaintiffs' failure to consent to additional construction on the defendant's property was wrongful arid sought damages. In a second count, the defendants claimed that they alone had paid all expenses related to the maintenance of the parking areas on both the plaintiffs' property and the defendants' property, that the plaintiffs had been thereby been unjustly enriched, and that the defendants were entitled to damages in the amount of a proportionate share of such expenses.
During the pendency of the 1978 action the defendants, without obtaining the plaintiffs' consent, commenced and completed construction of an additional one-story bank building approximately 3,660 square feet in area, situated to the west of their original building (the "Bank Building"). The Bank Building was completed in 1980 and was separated from the defendants' existing building by a narrow pedestrian walkway. In 1986, the defendants withdrew the first count of their complaint, but pursued their claim for reimbursement of a proportional share of parking lot maintenance expenses. That claim was referred to an attorney fact finder who rendered a report which was accepted by the court and became the basis for a judgment against the plaintiffs and in favor of the defendants.
In her report dated June 14, 1987, the fact finder determined the plaintiffs' property and the defendants' property appeared to be part of the same shopping center and that it was not practicable for either the plaintiffs or the defendants to maintain their parking lots separately. The fact finder found that the prime tenant of the shopping center was a tenant of the defendants and that the plaintiffs benefitted economically from the presence of the prime tenant. She further found that plaintiffs had not negotiated in good faith with the defendants with regard to sharing the costs of parking lot maintenance. Under these circumstances the fact finder determined that the plaintiffs were obligated to reimburse the defendants for 16.96% of total parking lot maintenance expenses incurred prior to January 1, 1981 and 15.33% of such expenses thereafter. These percentages were apparently based on the square footage of the buildings owned by the respective parties and reflected the defendants' higher proportionate share resulting from the completion of the Bank Building in 1980.
At trial, the evidence established that both the plaintiffs and the defendants benefitted from the erection of the Bank Building. The defendants benefitted directly from the rental income from the tenant of the Bank Building, while both parties benefitted indirectly from the increase of traffic in the shopping center and the ensuing benefit to their tenants.
In October 1992 the defendants completed construction of a new restaurant building, approximately 1,800 square feet in area, located in the pedestrian walkway between their original building and the Bank Building (the "Restaurant Building"). The effect of this construction was to unite all the defendants' buildings into one structure of approximately 35,000 square feet.
In 1993 the defendants initiated a second lawsuit against the plaintiffs seeking to recover the plaintiffs' proportionate share of parking lot expenses. That litigation was eventually settled on June 4, 1998 when the parties stipulated to a judgment reflecting an agreement as to the amount that the plaintiffs owed the defendants for parking lot maintenance through December 31, 1994. The settlement stipulation expressly excluded the resolution of any claims that the plaintiffs might have against the defendants for breaches of the Declaration.
In 1998 the plaintiffs had an opportunity to rent one of their retail stores for use as a bagel shop. Under the Norwalk Zoning Regulations the bagel shop was considered to be a restaurant use which required more parking than a retail use. The plaintiffs claim that they were unable to rent to the bagel shop operator because of insufficient parking. The plaintiffs claim that the construction of the Restaurant Building by the defendants and its continued use as a restaurant absorbed all available parking on "Tract A" and precluded their proposed use as a bagel shop.
The plaintiffs commenced this action in November 1998 claiming that the defendants had violated their rights under the Declaration in 1979-80 and again in 1992 by erecting additional buildings within the areas of Tract "A" reserved for parking. The first count claims trespass, the second count — breach of contract, the sixth count — conversion, the seventh count — unjust enrichment, the eighth count — constructive trust, and the ninth count — accounting.
The plaintiffs' third, fourth, fifth and sixth counts involved claims that in 1997 the defendants interfered with the proposed lease between the plaintiff and a bagel shop operator. The tenth count alleged that all of the defendants' activities constituted CUTPA violations.
The defendants filed an answer with eleven special defenses, including res adjudicata, collateral estoppel, laches, unclean hands, statute of limitations and set off. The answer also included two counterclaims in which the defendants seek to recover from the plaintiffs a proportionate share of the funds they expended for parking lot maintenance for the period January 1, 2001 to August 31, 2004.
The case was tried to the court on September 28 and 29, 2004. At the conclusion of plaintiffs' case, plaintiffs' counsel acknowledged that insufficient evidence had been presented to prove either the third count — fraudulent misrepresentation or the fourth count — negligent misrepresentation and the court dismissed those counts. To the extent that the tenth count claimed that the interference with the bagel shop lease alleged in the third count constituted a CUTPA violation, that claim was necessarily abandoned at the same time. The fifth count alleging tortious interference with contact and the sixth count alleging conversion were withdrawn by plaintiffs' counsel during oral argument after the conclusion of all testimony.
Despite the withdrawal of all counts relating to the bagel shop lease, the plaintiffs' brief included a section claiming that the plaintiffs had established their right to damages because of the defendants' alleged interference with that lease. To the extent that there is any question that the third, fourth, fifth and sixth counts were not resolved at trial, the court finds the evidence presented by plaintiffs did not establish: 1) that there was an insufficiency of parking; 2) that the plaintiff's empty store could not be used as a bagel shop under Norwalk Zoning Regulations, 3) that the defendants had engaged in any wrongful conduct related in any way to the bagel shop lease; or 4) that the plaintiffs had suffered any damages by virtue of losing the bagel shop lease. Accordingly, the court finds the issues on those counts for the defendants.
Plaintiffs' Remaining Legal Claims
The plaintiffs' first count alleges that the defendants committed a trespass by erecting structures on areas of their property which were reserved for parking and vehicular and pedestrian access. The second count alleges that the same conduct constitutes a breach of contract. The defendants first erected a structure within the area of their property designated for parking in 1980 when the Bank Building was completed. The erection of the Bank Building also prevented the use of the land lying between the Bank Building and defendants' original building for either parking or vehicular circulation. The plaintiffs took no action against the defendants with respect to the construction of the Bank Building until they filed the present action in November 1998.
In the their first count the plaintiffs complain only that "the amount of parking area available for use by the Plaintiffs in connection with its existing rental space has been diminished." (Paragraph 10) Similarly in their second count the plaintiff complain only of the "reduced parking area." (Paragraph 9)
The plaintiffs' tenth count must be redacted to remove the allegations of the dismissed third count relating to the bagel shop lease. After redaction, the tenth count alleges the breach of contract alleged in the second count constitutes a violation of the Connecticut Unfair Trade Practices Act
Plaintiffs' Remaining Equitable Claims
The plaintiffs' seventh count alleges that the defendants were unjustly enriched by the rents they collected from the buildings they erected on their property in violation of the declaration. The eighth count alleges constructive trust with respect to the rents collected by the defendants from the tenants of such buildings. The ninth count alleges that the defendants breached a fiduciary duty they owed to the plaintiffs and prays for an accounting.
Res Judicata — Collateral Estoppel
In their first special defense the defendants claim that the principle of res judicata and the fact finders' report of June 14, 1987 operated to bar plaintiffs' claims set forth in their first, second, seventh, eighth and ninth counts. In their second special defense the plaintiffs claim that the same fact finders' report "collaterally estopped" the plaintiff from asserting the same claims. The court disagrees.
The withdrawal by defendants of the first count of their 1978 complaint removed the issue of their right to construct additional buildings from that litigation. The only issue remaining in that case was the amount owed by the plaintiffs to the defendants for the costs of parking lot maintenance. The question of the defendants' right to build was not addressed in the fact finders' report or resolved by it.
The defendants also urge that because the fact finder took the construction of the Bank Building and its size into account when allocating responsibility for parking lot maintenance, the principle of collateral estoppel operates to foreclose the plaintiffs from litigating any questions regarding the legitimacy of the Bank Building.
"The fundamental principles underlying the doctrine of collateral estoppel are well established. The common-law doctrine of collateral estoppel, or issue preclusion, embodies a judicial policy in favor of judicial economy, the stability of former judgments and finality . . . Collateral estoppel means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit . . . Issue preclusion arises when an issue is actually litigated and determined by a valid and final judgment, and that determination is essential to the judgment . . . Collateral estoppel express[es] no more than the fundamental principle that once a matter has been fully and fairly litigated, and finally decided, it comes to rest." (Internal quotation marks omitted.) Cumberland Farms, Inc. v. Groton, 262 Conn. 45, 58, 808 A.2d 1107 (2002)
By the time the fact finders' report was issued the first count in the 1978 action asserting Defendants' right to erect additional structures despite the provisions of the Declaration had been withdrawn by the defendants. The fact finders' report only addressed the claims set forth in the second count relating to claims for reimbursement for expenses incurred by the defendants in connection with the maintenance of the shared parking lot.
The fact finder took note of the increased areas of defendants' buildings after the erection of the Bank Building only for the purpose of determining the plaintiff's proportionate share of parking lot maintenance. The issue of whether the defendants had the right to construct the Bank Building was not before the fact finder and was not addressed in her report. It follows that her report can not operate as a resolution of that issue on the basis of either res judicata or collateral estoppel.
Laches
In their third special defense the defendants claim that the doctrine of laches operates to bar the plaintiffs' recovery under their first, second, seventh, eighth and ninth counts. In Giordano v. Giordano, 39 Conn.App 183, 214, 664 A.2d 1136 (1995) the Appellate Court stated "A laches defense is not . . . a substantive right that can be asserted in both legal and equitable proceedings. Laches is purely an equitable doctrine, is largely governed by the circumstances and is not to be imputed to one who has brought an action at law within the statutory period . . . It is an equitable defense allowed at the discretion of the trial court in cases brought in equity."
The court finds that the defense of laches is not available to the defendants with respect to either the first count or the second count, both of which are based on legal claims. As discussed below, the court has determined that the plaintiffs' equitable claims are barred by various statutes of limitations. Accordingly there is no need for the court to consider whether these claims are also barred by laches.
Unclean Hands — Breach of Contract
In their fourth and fifth special defenses the defendants allege that the findings of the fact finder with respect to the plaintiffs' lack of good faith with respect to the defendants' claim for contributions to the cost of park lot maintenance and alleged breaches of the Declaration by the plaintiffs, bar the plaintiffs from seeking relief. The court finds that the defendants have not presented evidence sufficient to establish either of these defenses. Accordingly, the court finds the issues on the defendants' fourth and fifth special defenses for the plaintiffs.
Statutes of Limitations
In their sixth through tenth special defenses the defendants have claimed that one or more of the following statutes of limitations apply to plaintiffs' claims: General Statutes § 52-575, General Statutes § 52-575a, General Statutes § 52-576, and General Statutes § 52-577.
Fifteen years for entry upon land.
"No action or any other type of court proceeding shall be brought to enforce a private restriction recorded in the land records of the municipality in which the property is located or a notation on a filed map pertaining to the use of privately owned land, the type of structures that may be erected thereon or the location of same unless such action or proceeding shall be commenced within three years of the time that the person seeking to enforce such restriction had actual or constructive knowledge of such violation. This section shall be deemed not to apply to any private restriction or notation pertaining to (a) any public utility easement; (b) any right-of-way; (c) any park or open space land; (d) any private driveway, roadway or street, or (e) any sewer line or water line.
Six years for simple or implied contract.
Three years for tort action.
The Bank Building was completed in 1980, more than 18 years prior to the filing on plaintiffs' action. The Restaurant Building was completed in October 1992, over six years prior to the filing of this action. In their post-trial brief the plaintiffs claim that the breach of contract was "a continuing one" and that the alleged trespass was a continuing trespass. The court disagrees. The plaintiffs' causes of action arose when they became or should have become aware of the defendants' actions and the statute of limitations began to run at that time. Tamowsky v. Socci, 271 Conn. 284, 856 A.2d 408 (2004)
The plaintiffs' second count claiming that the construction of the Bank Building and the Restaurant Building constituted breaches of contract had to be brought within six years of the alleged breach. With respect to the Bank Building, such a claim had to be brought no later than 1986. With respect to the Restaurant Building, such claims had to be filed by October 1998. The present action was filed in November 1998 after the expiration of the statute of limitations with respect to both the Bank Building and the Restaurant Building.
With respect to plaintiffs' easement rights under the Declaration the court finds that the fifteen-year statute of limitations under General Statutes § 52-575 for entry upon land applies. The plaintiffs concede, as they must, the passage of more than fifteen years between the construction of the Bank Building and the filing of this action. Similarly, they concede that the presence of the Bank Building was open and visible. However, plaintiffs claim that because the defendants initially made an unsuccessful request to the plaintiffs for their consent to the construction, the use could not be under a claim of right. The court disagrees.
The evidence presented to the court demonstrates that the plaintiffs never consented to the erection of the Bank Building. The defendants' construction of the Bank Building was not done with the permission of or license from the plaintiffs. The court finds that with respect to the construction of the Bank Building and the consequences ensuing from that construction, the defendants have established their special defense under General Statutes § 52-575.
The construction of the Bank Building had several impacts on the plaintiffs' rights under the Declaration. First, the construction violated the mandate of Paragraph "Four" that "no additional structures shall be erected on Tract "A." Second, the construction prevented the plaintiffs from exercising any of their rights under Paragraph "One" in the area covered by the footprint of the Bank Building. In addition, the construction prevented the plaintiffs from exercising their rights of automotive "ingress, egress and parking" in the area between the defendants' original building and the Bank Building (the area in which the Restaurant Building was subsequently constructed).
After the construction of the Bank Building the area in which the Restaurant building was subsequently built was no longer usable for parking or vehicular traffic. The area was only available for use as a pedestrian walkway. The construction of the Restaurant Building in 1992 violated Paragraph "Four" of the Declaration and prevented the plaintiffs from exercising their easement for pedestrian ingress and egress in the area covered by the footprint of the Restaurant Building.
The provisions of Paragraph "Four" of the Declaration prohibiting construction of additional buildings on "Tract A" is clearly a restriction and not an easement. In any event, the law draws no distinction between a negative easement and a restriction. 1 Restatement (Third), Property, Servitudes § 1.2 Comments b. and h. (2000) The court finds that the three-year statute of limitations set forth in General Statutes § 52-575a prevents the plaintiffs from asserting their claim that the construction of the Restaurant Building in 1992 constituted a violation of Paragraph "Four" of the Declaration.
The plaintiffs' claims under their tenth count, alleging CUTPA violations, are subject to the three-year statute of limitations set forth in General Statutes § 42-100g(f). Accordingly, the remaining CUTPA claims, based on the construction of the Bank Building and Restaurant Building, are barred.
The only aspect of the plaintiffs' legal claims not barred by one or more statutes of limitations is a potential claim that the construction of the Restaurant Building in 1992 and 1993 constituted a violation of the plaintiffs' easement rights for pedestrian ingress and egress under Paragraph "One" of the Declaration. However, that claim was not included in either the plaintiffs' complaint or their proof at trial. The failure of the plaintiffs to articulate or prove a claim for damages based on the defendants' interference with pedestrian easement in 1992 precludes any recovery by the plaintiffs on that basis. "The purpose of the complaint is to limit the issues to be decided at the trial of the case and is calculated to prevent surprise. Only those issues raised by the plaintiffs in the latest complaint can be tried . . ." Farrell v. St. Vincent's Hospital, 203 Conn. 554, 557-58, 525 A.2d 954 (1987).
The court finds that the plaintiffs' equitable claims are also barred by the applicable statutes of limitations. Each of the plaintiffs' equitable claims are based on facts that would also permit them to seek legal either in contract or tort. Accordingly, those claims are also barred. "Where a party seeks equitable relief pursuant to a cause of action that would also allow that party to seek legal relief, concurrent legal and equitable jurisdiction exists, and the statute of limitations that would be applicable to bar the legal claim also applies to bar the equitable claim . . ." Dowling v. Finley Associates, Inc., 248 Conn. 384, 367, 727 A.2d 1245 (1999).
Set Off
In their eleventh special defense, the defendants claim that they are entitled to a set off for "incurred expenses of a similar nature as those judicially determined to be joint expenses." As the court has determined that the plaintiffs are not entitled to recover under their complaint, it follows that there can be no set off against plaintiffs' recovery.
Defendants' Counterclaims
The defendants have filed counterclaims seeking to recover from the plaintiffs a proportionate share of the costs of maintenance of the common parking areas from January 1, 2001. These counterclaims rely on the finding of the fact finder in the 1978 litigation and the basis on which the 1993 litigation was settled. The defendants presented receipts documenting out-of-pocket expenses they incurred from January 1, 2001 to August 31, 2004, in connection of the maintenance of the shared parking lot. Those expenses totaled $163,511.39.
The 1987 fact finders' report and the 1998 settlement adopted a methodology of dividing parking lot expenses between the defendants and the plaintiffs based on the ratio of their respective the floor areas of their buildings. Prior to the construction of the Bank Building the fact finder allocated 16.96% of the expenses to the plaintiffs and 83.04% to the defendants. After construction of the Bank Building the fact finder allocated 15.33% of the expenses to the plaintiffs and 84.67% to the defendants. Taking into account the construction of the Restaurant Building in 1992 and using the fact finder's methodology, the plaintiffs' share of parking lot expenses for the period 2001 to 2004 would be 14.62% or $23,908.09 out of the total of $163,511.39. However, the defendants concede that $5,530.06 of the plaintiffs' share has been paid by tenants and claim only the balance of $18,378.02.
In their brief the plaintiffs dispute that they are indebted to the defendants for parking lot maintenance. However, the plaintiffs do not claim that, during the years in question, anyone other than the defendants performed the required parking lot maintenance. The plaintiffs offered no evidence to show that the bills and invoices submitted in evidence by defendants were incorrect or excessive. Nevertheless they urge that the court should reject the defendants' evidence because only the unsupported testimony of Michael Discala links it to the Strawberry Hill Shopping Center. However, the court found Michael Discala's testimony to be entirely credible and consistent with the documentary evidence. The plaintiffs' final claim in their brief is that they are entitled to a set off against the defendants' claim for certain water charges. However, no such special defense was pleaded as required by P.B. § 10-50.
The court finds the issues for the defendants on their counterclaim and find that they are entitled to damages from the plaintiffs in the amount of $18,378.02.
David R. Tobin, Judge