The plaintiff landlords, D, C, and B Co., sought, by way of summary process,
to regain possession of certain premises leased to the defendant tenants,
N, S, and S Co. Since 1970, the plaintiffs’ property was used as an
automobile repair facility, and the plaintiffs had installed underground
gasoline and waste oil storage tanks on the property but failed to follow
proper protocols for their removal, which resulted in environmental
contamination. Subsequently, in July, 2014, seven months after the par-
ties entered into a lease of the property, the Department of Energy and
Environmental Protection issued an enforcement order directed to B
Co. and commenced a civil action that resulted in a stipulated judgment.
During trial in the present case, the defendants asserted the special
defense of equitable nonforfeiture and argued in their posttrial brief
that they withheld rent payments because of their counsel’s advice to
hold the rent in escrow, because they were unaware of the contamina-
tion, and because they were concerned that one of their two businesses
would not be permitted to open due to the plaintiffs’ failure to extend
their rent abatement period, despite the delay of the plaintiffs’ property
manager and leasing agent in obtaining certificates of occupancy for
retail or food service uses. The trial court rendered a judgment of
possession in favor of the plaintiffs, from which the defendants appealed
to this court. Held:
1. The defendants could not prevail in their claim that the trial court applied
an incorrect legal standard in determining that they failed to prove their
special defense of equitable nonforfeiture: that court properly applied
the doctrine of equitable nonforfeiture to the facts of this case, as it
determined that the defendants, who had admitted that they deliberately
stopped paying rent upon advice of their counsel because they were
upset about the contamination, failed to prove the first element of the
equitable nonforfeiture test, namely, that the nonpayment of rent was
not wilful or grossly negligent, and the court, having made that determi-
nation, was not required to address the other elements; moreover, the
court determined that the defendants failed to prove they made a good
faith effort to comply with the lease or had a good faith dispute as to
its meaning, and it reasonably could have reached the conclusions it did
on the basis of certain testimony presented, which it was free to credit.
2. The defendants’ claim that the trial court erred in finding that the plaintiffs
were unaware of contamination until after July 1, 2014, was unavailing,
as there was evidence in the record to support that finding; D testified
that he believed any contamination detected in 2011 was within accept-
able limits and that he told the defendants that there was some contami-
nation, but if there was any problem, he would take care of it, and even
if the existence of contamination on the property requiring action prior
to July 1, 2014, was concealed from the defendants, the court also found
that the plaintiffs had complied with their obligation under the lease
and had taken care of the problem, and that the remediation had no
effect on the progress of the defendants’ renovations or their ability to
open both of their businesses on the property, and, therefore, even if
the court’s finding that the plaintiffs were unaware that the tank graves
contained gasoline type contaminants above action levels was errone-
ous, any error was harmless.
3. The defendants’ claim that the trial court abused its discretion in finding
that they failed to prove their special defenses of unjust enrichment
and violation of the implied covenant of good faith and fair dealing
was not reviewable, the defendants having failed to brief the claim
adequately; the defendants’ analysis appeared in a single paragraph of
their brief, they did not distinguish between their third or fifth special
defenses, both of which alleged a violation of the implied covenant of
good faith and fair dealing, there were no legal authorities cited or an
analysis of whether the special defenses were legally viable, and the
defendants did not cite any standard of review governing this court’s
review and inaccurately asserted that the court failed to make any factual
findings as to the fourth and fifth special defenses, and that the court
failed to refer to the special defenses alleging a violation of the implied
covenant of good faith and fair dealing.
4. The trial court did not abuse its discretion in denying the defendants’
request for a continuance so that T, an enforcement officer employed by
the department, could testify: the defendants failed to make an adequate
showing as to why T, who purportedly was under subpoena, was not
available to testify as scheduled, or why T’s deposition was not taken
beforehand and offered into evidence in lieu of live testimony, they
made no proffer to the court as to the necessity of T’s testimony or
why the denial of a continuance would impair their defense, nor did
they request a capias to compel T’s presence, and the court appropriately
considered that counsel for the defendants moved for a continuance
on the day of trial; moreover, even if the court abused its discretion,
any error was harmless, because even though the defendants argued
before this court that denying their request effectively kept out of evi-
dence department documentation concerning the history of contamina-
tion on the property, the trial court considered the contamination issue
to be ‘‘pretextual’’ and found that the defendants suffered no detriment
as a result of the contamination and remediation, and that they did not
offer any evidence that they complained about the issue until they filed
their answer in this case, and, thus, the defendants did not demonstrate
that they were harmed by the court’s purported error.
Argued February 11—officially released October 1, 2019 Procedural History