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Willbrook Properties, LLC v. SHF-Old Saybrook, LLC

Superior Court of Connecticut
Jun 13, 2017
CV166015863 (Conn. Super. Ct. Jun. 13, 2017)

Opinion

CV166015863

06-13-2017

Willbrook Properties, LLC v. SHF-Old Saybrook, LLC et al


UNPUBLISHED OPINION

MEMORANDUM OF DECISION RE MOTIONS FOR SUMMARY JUDGMENT NOS. 111 AND 113

Elpedio N. Vitale, J.

The plaintiff, Willbrook Properties, LLC, moves for summary judgment on its breach of contract complaint against the defendants, The Rothschild Family Trust; The Victor B. Rothschild Exemption Trust F/B/O Ryan Rothschild, aka: The Victor B. Rothschild 1993 Trust (collectively, trusts); and SHF-Old Saybrook, LLC (SHF-Old Saybrook). The trusts, in turn, have moved for summary judgment on the plaintiff's complaint. The dispute between the parties arises out of a commercial lease and an alleged personal guarantee.

Ryan Rothschild was originally a defendant in this action, but he has since been removed as a party following his filing of a bankruptcy petition in the United States Bankruptcy Court for the Southern District of California. The remaining defendants will therefore simply be referred to as the defendants.

The plaintiff alleges the following relevant facts in its one-count, amended complaint. Ryan Rothschild is the sole trustee of the trusts and is also a member of SHF-Old Saybrook. The trusts are also members of SHF-Old Saybrook. On June 1, 2014, Rothschild, as a member of SHF-Old Saybrook, entered into a written lease agreement with the plaintiff in which SHF-Old Saybrook agreed to rent a premises in Old Saybrook, Connecticut, from June 1, 2014, to May 31, 2020. On the same date, Rothschild executed a separate agreement to personally guarantee SHF-Old Saybrook's performance of its obligations under the lease. The lease identified Rothschild's personal guarantee as " the essence of the consideration for [the lease]"; Pl.'s Am. Compl. Ex. A, ¶ 29; and further provided that, " [i]n the event there [were then] additional members of [SHF-Old Saybrook], or if additional or other persons or entities [thereafter became] members, they shall also jointly and severally guarantee [the lease]." Pl.'s Am. Compl. Ex. A, ¶ 29. At a certain point, the defendants ceased paying the monthly rent due under the lease and have refused repeated demands for payment.

The plaintiff filed its amended complaint on September 8, 2016; this is the operative complaint for purposes of the present motions.

On January 17, 2017, the plaintiff moved for summary judgment against the defendants and filed, in support thereof, a memorandum of law (memorandum in support) and several exhibits. The trusts then filed their own motion for summary judgment on February 1, 2017, in support of which they also filed a memorandum of law (memorandum in support) and several exhibits. The court heard oral argument on the motions on March 20, 2017.

On the same date, the trusts also filed a memorandum of law in opposition to the plaintiff's motion for summary judgment. Because the trusts have simply incorporated into this memorandum the arguments that they make in their memorandum in support, the memorandum in support will be treated as both supporting the trusts' motion, and opposing the plaintiff's motion.

DISCUSSION

" Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." (Internal quotation marks omitted.) Grenier v. Commissioner of Transportation, 306 Conn. 523, 534, 51 A.3d 367 (2012). " [T]he genuine issue aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred." (Internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002). " In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact." (Internal quotation marks omitted.) Romprey v. Safeco Ins. Co. of America, 310 Conn. 304, 319-20, 77 A.3d 726 (2013). " To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Ferri v. Powell-Ferri, 317 Conn. 223, 228, 116 A.3d 297 (2015). " In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Stuart v. Freiberg, 316 Conn. 809, 820-21, 116 A.3d 1195 (2015).

I

Liability of SHF-Old Saybrook as Primary Obligor

With respect to the plaintiff's claim against SHF-Old Saybrook, the undisputed evidence establishes that SHF-Old Saybrook breached its obligations under the lease. The lease--a copy of which was submitted as an exhibit to the amended complaint and also as evidence in support of the parties' respective motions for summary judgment--identified SHF-Old Saybrook as the lessee of the subject property; see Pl.'s Am. Compl. Ex. A, p. 1; and required SHF-Old Saybrook to make monthly rent payments to the plaintiff. See Pl.'s Am. Compl. Ex. A, ¶ 4. According to the uncontradicted affidavit testimony of William Childress, a member of the plaintiff, SHF-Old Saybrook failed to pay the rent from September 2015, through February 26, 2016, and there is now due and owing a principal sum of approximately $79, 536.56. Childress Aff. ¶ ¶ 5, 6. The plaintiff has therefore established the lack of any genuine dispute as to the essential elements of its breach of contract claim; see CCT Communications, Inc. v. Zone Telecom, Inc., 324 Conn. 654, 667-68, 153 A.3d 1249 (2017) (" [t]he elements of a breach of contract action are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages" [internal quotation marks omitted]); and, accordingly, the plaintiff is entitled to judgment against SHF-Old Saybrook as a matter of law.

II

Liability of Trusts as Guarantors

Turning to its claim against the trusts, the plaintiff contends in its memorandum in support that, because Rothschild is the sole trustee of the trusts and the trusts are members of SHF-Old Saybrook, Rothschild was the only person who could have bound the trusts to the guarantee provision in the lease. From this the plaintiff concludes that Rothschild, in executing the lease in his capacity as manager of SHF-Old Saybrook, was also necessarily acting in his capacity as trustee of the trusts. The trusts counter in their memorandum in support that they cannot be held liable under the guarantee provision because they were not parties to the lease. The trusts additionally contend that they cannot be charged with a breach of the guarantee provision because the lease fails to satisfy the statute of frauds, General Statutes § 52-550(a).,

General Statutes § 52-550(a) provides: " No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged: (1) Upon any agreement to charge any executor or administrator, upon a special promise to answer damages out of his own property; (2) against any person upon any special promise to answer for the debt, default or miscarriage of another; (3) upon any agreement made upon consideration of marriage; (4) upon any agreement for the sale of real property or any interest in or concerning real property; (5) upon any agreement that is not to be performed within one year from the making thereof; or (6) upon any agreement for a loan in an amount which exceeds fifty thousand dollars."

The trusts also argue in their memorandum in support that they cannot be held liable under Rothschild's separately executed guarantee because Rothschild signed that guarantee in his personal capacity only. The plaintiff, however, is proceeding under the theory that the trusts are liable under the guarantee provision in the lease-not Rothschild's separate, personal guarantee. Therefore, the court need not address this additional argument.

It is " a general principle so fundamental that it rarely receives mention in case law or commentary . . . that only parties to contracts are liable for their breach. [T]he obligation of contracts is limited to the parties making them, and, ordinarily, only those who are parties to contracts are liable for their breach. Parties to a contract cannot thereby impose any liability on one who, under its terms, is a stranger to the contract, and, in any event, in order to bind a third person contractually, an expression of assent by such person is necessary . . . In other words, [a] person who is not a party to a contract (i.e., is not named in the contract and has not executed it) is not bound by its terms . . . Thus, [a]s a general rule, [an action] for breach of contract may not be maintained against a person who is not a party to the contract . . ." (Citations omitted; internal quotation marks omitted.) FCM Group, Inc. v. Miller, 300 Conn. 774, 797-98, 17 A.3d 40 (2011).

" A guarantee, similar to a suretyship, is a contract, in which a party, sometimes referred to as a secondary obligor, contracts to fulfill an obligation upon the default of the principal obligor . . . This type of agreement is generally subject to the same requisites of contract formation that apply to the formation of any other contract." (Citations omitted; footnote omitted; internal quotation marks omitted.) 73-75 Main Avenue, LLC v. PP Door Enterprise, Inc., 120 Conn.App. 150, 165, 991 A.2d 650 (2010). Consequently, an action for breach of a guarantee will not lie against a party absent some evidence of that party's assent to answer for the principal obligor's duty. " Furthermore, [p]ursuant to the Statute of Frauds, a contract creating a secondary obligation is unenforceable as a contract to answer for the duty of another unless there is a written memorandum satisfying the Statute of Frauds or an exception applies . . . [S]ee also General Statutes § 52-550. Specifically, [a] promise to be surety for the performance of a contractual obligation, made to the obligee, is binding if (a) the promise is in writing and signed by the promisor and recites a purported consideration . . ." (Citation omitted; emphasis in original; footnote omitted; internal quotation marks omitted.) 73- 75 Main Avenue, LLC v. PP Door Enterprise, Inc., supra, 165-66. Therefore, in order for the court to find a party liable as a secondary obligor under a written guarantee, it must find not merely that the party expressed assent to be bound by the guarantee, but that the party actually signed the guarantee. See id., 166 (Noting that, " in order for the [trial] court to have found [the defendant] personally liable as a guarantor of the lease, it had to find that there was a written guarantee agreement that satisfied the statute of frauds. More pointedly, the court had to find that the agreement had been personally signed by [the defendant]").

In the present case, the undisputed evidence establishes that the trusts were not parties to and did not sign the lease or the guarantee provision contained therein. Although the guarantee provision purports to make the other members of SHF-Old Saybrook additional guarantors of the lease, it is ineffective absent the consent of the parties it proposes to bind the trusts. The lease, however, evinces no such assent. Indeed, the lease identifies only the plaintiff and SHF-Old Saybrook as the parties to the agreement: " THIS INDENTURE, made by and between WILLBROOK PROPERTIES, LLC, a Connecticut limited liability company . . . (hereinafter referred to as the '[l]essor'), and SHF-Old Saybrook, LLC, a Connecticut limited liability company . . . (hereinafter referred to as the '[1]essee')." (Emphasis in original.) Pl.'s Am. Compl. Ex. A, p. 1. The signature provision at the end of the lease likewise indicates that the agreement was being made between the plaintiff, as lessor, and SHF-Old Saybrook, as lessee, and that Rothschild executed the agreement only in his capacity as a member of SHF-Old Saybrook and not in his capacity as trustee of the trusts. The signature provision identifies the plaintiff and SHF-Old Saybrook as the lessor and lessee, respectively, and provides a signature line below each party's name. Pl.'s Am. Compl. Ex. A, p. 15. On SHF-Old Saybrook's signature line appears Rothschild's signature, under which there appears the notations " A member" and " Duly Authorized." Pl.'s Am. Compl. Ex. A, p. 15. In sum, it is clear from the lease that the only parties to the agreement were the plaintiff and SHF-Old Saybrook and that Rothschild executed it only in his capacity as a member of SHF-Old Saybrook. Therefore, under both general principals of contract law and the statute of frauds, the trusts cannot be held liable as guarantors of SHF-Old Saybrook's obligations under the lease. Accordingly, the trusts are entitled to judgment in their favor as a matter of law.

Rothschild admits in his affidavit that the signature on the lease is his. Rothschild Aff. ¶ 6.

CONCLUSION

For the foregoing reasons the plaintiff's motion for summary judgment is denied as to the trusts. Plaintiff's motion for summary judgment is granted as against SHF-Old Saybrook. The trust's motion for summary judgment is granted.


Summaries of

Willbrook Properties, LLC v. SHF-Old Saybrook, LLC

Superior Court of Connecticut
Jun 13, 2017
CV166015863 (Conn. Super. Ct. Jun. 13, 2017)
Case details for

Willbrook Properties, LLC v. SHF-Old Saybrook, LLC

Case Details

Full title:Willbrook Properties, LLC v. SHF-Old Saybrook, LLC et al

Court:Superior Court of Connecticut

Date published: Jun 13, 2017

Citations

CV166015863 (Conn. Super. Ct. Jun. 13, 2017)