Opinion
HHDCV155039621S
03-02-2017
Companions and Homemakers, Inc. v. Lorenzo DiClemente
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Nina F. Elgo, J.
This action arises out of a dispute between the plaintiff, Companions and Homemakers, Inc. and the defendant, Lorenzo DiClemente, over amounts allegedly owed for a security deposit and attorneys fees. The record discloses the following facts and procedural history. The plaintiff leased certain commercial space (the premises) owned by the defendant. Initiated as a small claims action--Docket No. SCC-573638 on April 15, 2015--and subsequently tried to this court on November 3, 2016, the plaintiff claims that it was wrongfully denied full reimbursement of its security deposit upon its vacation of the premises, and seeks the balance of the deposit and associated attorneys fees it expended in connection with the prosecution of this action. The defendant denies these claims and asserted that the plaintiff failed timely to vacate the premises as a special defense. The defendant argues it was justified in deducting attorneys fees from the plaintiff's security deposit because he was required to retain an attorney to initiate a summary process action in order to secure the plaintiff's eviction. The defendant has also filed a counterclaim seeking his attorneys fees incurred in defending this action. The defendant subsequently amended his special defenses by claiming accord and satisfaction.
The plaintiff and defendant entered into a five-year commercial lease agreement on July 10, 2009, with the plaintiff's tenancy commencing on July 15, 2009. When the tenancy expired pursuant to the lease terms on July 15, 2014, the parties agreed to continue the lease period on existing terms until September 30, 2014. The plaintiff did not vacate the premises on September 30, 2014 and instead, continued to occupy the premises on a month-to-month tenancy.
On November 25, 2014 the plaintiff gave notice to the defendant that it was terminating the month-to-month tenancy on December 31, 2014. The defendant served a Notice to Quit on November 28, 2014, on the basis of lapse of time, which required the plaintiff to vacate the premises on or before December 3, 2014. The plaintiff did not vacate the premises until on or about December 31, 2014, but paid rent for its use and occupancy up to the date it vacated the premises, which was accepted by the defendant. In the interim, the defendant commenced a summary process action seeking the plaintiff's eviction in Housing Court with a return date of December 17, 2014 but withdrew it on January 7, 2015--HDSP-177108--before any court hearings were held.
In a letter dated February 20, 2015, the defendant returned the security deposit to the plaintiff in the amount of $3, 548.90, after deduction of the legal fees and costs he incurred in initiating the eviction proceedings. The defendant noted the basis for the deduction on the memo line of the check as well as in the correspondence sent with the security deposit refund. On May 12, 2015, the plaintiff deposited the defendant's check with no restrictions or reservations of rights.
1. Whether the Defendant was Entitled to Deduct Legal Fees and Costs from the Security Deposit
In asserting its claim for the full balance of its security deposit, the plaintiff contends that the lease does not provide for attorneys fees unless there was a judgment rendered in the defendant's favor: The applicable lease provision, paragraph nineteen, entitled " ATTORNEYS FEES, " provides: " In the event that Lessor or Lessee is required to employ an attorney to enforce against the other party any of its obligations or any default of any provision set forth herein, it is hereby agreed that the prevailing party shall be entitled to receive its attorneys fees and costs incurred from the non-prevailing party."
This court agrees with the plaintiff. In Young v. Vlahos, 103 Conn.App. 470, 479, 929 A.2d 362 (2007), the court observed that " [a]bsent contractual or statutory authorization, there can be no recovery, either as costs or damages, for the expenses of litigation or the expenditure for counsel fees by a party from his opponent." As such, it is clear that the " contractual, " or lease terms, authorize the circumstances in which attorneys fees may be awarded, which in this case are provided for in paragraph nineteen of the commercial lease.
A review of the plain language of paragraph nineteen makes clear that a " prevailing party" is entitled to attorneys fees from the " non-prevailing party." While there is no dispute that the defendant initiated a summary process action, the matter was withdrawn and no judgment was rendered in the defendant's favor. Thus, this court cannot find that the defendant " prevailed" within the meaning of paragraph 19 of the lease. The undisputed facts show that the defendant served the plaintiff with a notice to quit on November 28, 2014, demanding it vacate by December 3, 2014. Three days prior, on November 25, 2014, the plaintiff sent notice to the defendant that it intended to terminate the month to month tenancy on December 31, 2014. These actions, coupled with the defendant's withdrawal of the action on January 7, 2015, the court can discern, at best, a stalemate as of December 31, 2014.
The defendant insists that the deduction of attorneys fees from the security deposit is justified by paragraph three of the lease, which states, in relevant part: " [p]roviding there are no damages to the premises, the security deposit shall be returned to Lessee within thirty (30) days following said inspection." The defendant suggests that the authorities he has submitted to this court allow him to deduct attorneys fees from the plaintiff's security deposit because attorneys fees were awarded as damages in those cases. By its terms, however, paragraph three clearly means damages to the premises ; no other provision of the lease allows this court to infer that the word " damages" as used in provision three includes attorneys fees incurred by the defendant unrelated to any damage to the premises. As such, this court rejects the defendant's special defense.
2. Accord and Satisfaction
The defendant argues that the plaintiff's deposit of his check for the security deposit, reflecting the deduction of attorneys fees and costs, operates as an accord and satisfaction of the debt owed. Moreover, the defendant argues, the plaintiff deposited the check without declaring a reservation of rights.
" When there is a good faith dispute about the existence of a debt or about the amount that is owed, the common law authorizes the debtor and the creditor to negotiate a contract of accord to settle the outstanding claim. Such a contract is often initiated by the debtor, who offers an accord by tendering a check as " payment in full" or " in full satisfaction." If the creditor knowingly cashes such a check, or otherwise exercises full dominion over it, the creditor is deemed to have assented to the offer of accord. Upon acceptance of the offer of accord, the creditor's receipt of the promised payment discharges the underlying debt and bars any further claim relating thereto, if the contract of accord is supported by consideration." County Fire Door Corp. v. C.F. Wooding Co., 202 Conn. 277, 281, 520 A.2d 1028 (1987).
In this case, the plaintiff argues that the elements of accord and satisfaction are not present here, given the absence of a good faith dispute about the existence of a debt. The plaintiff specifically points out that the " defendant's withholding of funds signified defendant's specific claim by right--being asserted for the first time--under the lease for legal fees. For this reason, the defendant could not have intended the payment to resolve a good faith dispute; the dispute at the heart of this case did not exist until the defendant unilaterally deducted legal fees, fees the lease only permitted to be awarded to a prevailing party."
This court finds there was no accord and satisfaction. On one hand, the extensive and bitter exchange of correspondence between counsel for the plaintiff and defendant made clear that the defendant would be seeking attorneys fees as a result of the legal costs incurred in the dispute over when the plaintiff would vacate the premises. However, the check and the accompanying correspondence in no way make clear that the defendant was making an offer of accord. Specifically, the defendant did not give clear notice to the plaintiff that he intended the check to represent payment in full or that the payment was in full satisfaction of his debt to the plaintiff.
" In order to prove an accord and satisfaction, the defendant must show that at the time of the agreement a good faith dispute existed over the existence of a debt or over an amount owed, and that the debtor and the creditor negotiated a contract of accord to settle the claim. The accord must be a new agreement based on new consideration. The proponent must be able to show that there was a meeting of the minds, and that the offer by the debtor was clearly tendered as full satisfaction of the debt, and the payment was knowingly accepted." (Citations omitted; emphasis added.) Lamb v. Emhart Corp., 47 F.3d 551, 560-62 (2d Cir. 1995).
3. Counterclaim
The defendant claims attorneys fees for having to defend this action, which the plaintiff initiated as a small claims action. The plaintiff alleged in the pleadings filed that: " [w]hen plaintiff vacated, defendant refused to return a portion of the entire deposit, in violation of the lease. Plaintiff seeks recovery of the full deposit, and $500 in attorneys fees for prosecution of this action." The defendant's counterclaim for attorneys fees, however, is necessarily premised on the assumption that his deduction of attorneys fees in the first instance was justified as a matter of law, which this court's decision does not support. This court rejects the defendant's counterclaim to the extent that it seeks attorneys fees for defense of the small claims action.
Having considered all of the claims presented by the plaintiff and the defendant, this court finds for the plaintiff to the extent that the express provisions of the lease do not authorize attorneys fees under these facts--specifically, where the defendant did not " prevail" as a matter of law in the underlying action. To the extent that the lease explicitly entitles the lessee to its attorneys fees and costs incurred " to enforce against the other party any of its obligations or any default of any provision set forth herein . . ." the court finds that the plaintiff was entitled to the return of its security deposit in full, since there was no evidence presented demonstrating that the defendant suffered " damages to the premises" as required by paragraph three of the lease. Therefore, the court concludes that the plaintiff is entitled to $951.52 in damages, and awards attorneys fees in the amount of $500.00 pursuant to its prayer for relief.