Groundbreaking Decision Released by Connecticut Supreme Court
In a groundbreaking decision released on May 10, 2022 arising out of an appeal argued by Verrill attorney Andrew Nevas on November 16, 2021 in front of the Connecticut Supreme Court, the Supreme Court unanimously upheld the lower Court’s ruling in favor of Verrill client AGW Sono Partners LLC (“AGW Sono”).
AGW Sono is a real estate management and investment company that owns a portfolio of over 25 commercial properties on Washington Street in Norwalk, CT. During the pandemic, one of AGW Sono’s tenants (Downtown Soho, LLC) defaulted on its lease and guaranty in connection with a restaurant space. After a trial, the Court awarded AGW Sono damages in the amount of approximately $200,000. Downtown Soho then appealed the Court’s decision, arguing that economic effects of Connecticut Governor Ned Lamont’s pandemic related executive orders made it virtually impossible for them to meet the requirements of their lease, and that they should not have been obligated to pay any damages. Verrill filed a cross appeal on behalf of AGW Sono, arguing that the trial court improperly failed to award the Plaintiff the full measure of its damages, which totaled approximately $450,000.
AGW Sono prevailed on both the appeal and the cross appeal. The Supreme Court upheld the initial damages award in favor of the Plaintiff, holding that the executive orders did not relieve the defendants from their obligations under the lease and the guaranty. The Court also remanded the case to the trial court for a hearing to determine what further damages are due to Plaintiff.
The decision is expected to have nationwide impact, as it is believed to be the first time that an appellate level court in any state has addressed the issue of the impact that the COVID 19 epidemic has on the obligations of commercial landlords and tenants.
Nevas was joined on the brief by Verrill associate Travis Waller.