Heyman Associates No. 5, L.P. v. FelCor TRS Guarantor, L.P. ( 2014 )

******************************************************
The ‘‘officially released’’ date that appears near the
beginning of each opinion is the date the opinion will
be published in the Connecticut Law Journal or the
date it was released as a slip opinion. The operative
date for the beginning of all time periods for filing
postopinion motions and petitions for certification is
the ‘‘officially released’’ date appearing in the opinion.
In no event will any such motions be accepted before
the ‘‘officially released’’ date.
All opinions are subject to modification and technical
correction prior to official publication in the Connecti-
cut Reports and Connecticut Appellate Reports. In the
event of discrepancies between the electronic version
of an opinion and the print version appearing in the
Connecticut Law Journal and subsequently in the Con-
necticut Reports or Connecticut Appellate Reports, the
latest print version is to be considered authoritative.
The syllabus and procedural history accompanying
the opinion as it appears on the Commission on Official
Legal Publications Electronic Bulletin Board Service
and in the Connecticut Law Journal and bound volumes
of official reports are copyrighted by the Secretary of
the State, State of Connecticut, and may not be repro-
duced and distributed without the express written per-
mission of the Commission on Official Legal
Publications, Judicial Branch, State of Connecticut.
******************************************************
HEYMAN ASSOCIATES NO. 5, L.P., ET AL.
v. FELCOR TRS GUARANTOR, L.P.
(AC 35868)
Lavine, Keller and Mihalakos, Js.
Argued May 29—officially released October 7, 2014
(Appeal from Superior Court, judicial district of
Stamford-Norwalk, Hon. Taggart D. Adams, judge
trial referee.)
Robert M. Shields, Jr., with whom were Kenneth J.
Bartschi and, on the brief, Wesley W. Horton, for the
appellant (defendant).
Marc J. Kurzman, with whom were Brian A. Daley
and, on the brief, Peter M. Nolin, for the appellees
(plaintiffs).
Opinion
LAVINE, J. This case concerns the validity and
enforceability of a restrictive covenant prohibiting cer-
tain premises from being operated as an ‘‘upscale
hotel.’’ The defendant, FelCor TRS Guarantor, L.P.,
claims that the restrictive covenant was extinguished
as a result of certain land transfers, and thus appeals
from the judgment of the trial court in favor of the
plaintiffs, Heyman Associates No. 5, L.P. (Heyman), HD
Hotel, LLC (HD Hotel), AIM Management Corporation
(AIM), and TRJ II (TRJ).1 On appeal, the defendant
claims that the trial court improperly (1) failed to deter-
mine that the restrictive covenant was merged out of
existence,2 (2) found that the plaintiffs and HD Hotel
had standing to enforce the restrictive covenant, and
(3) awarded the plaintiffs attorney’s fees. We affirm the
judgment of the trial court.
The following facts, as found by the trial court in a
comprehensive memorandum of decision, and proce-
dural history are relevant to the resolution of this
appeal. In 1996, the plaintiffs owned two hotels in Stam-
ford located two city blocks apart: one was a Marriott,
which catered to an upscale market; the other, a
Ramada Inn, focused on the midscale market. The
hotels were owned by two separate business entities
each comprised of the Heyman, Meyer, and Jabara fami-
lies.3 The Stamford Marriott (Marriott) charged higher
room rates and provided superior service as compared
to the Ramada Inn, but because each hotel catered to
a different clientele, the hotels were complementary,
and did not impinge on one another’s business. Richard
Jabara, principal for TRJ, testified that if a large com-
pany needed hotel rooms in Stamford for a conference,
the plaintiffs could accommodate the salesmen in the
Ramada Inn and the executives in the Marriott.4
Shortly after the plaintiffs acquired the Ramada Inn
in 1996, Holiday Inns, Inc. (Holiday Inn), expressed an
interest in purchasing the Ramada Inn. As a condition
of selling the premises to Holiday Inn, the plaintiffs
required the imposition of a restrictive covenant prohib-
iting Holiday Inn from operating the premises as an
upscale hotel. The purpose of the restrictive covenant
was to protect the business of the Marriott, which the
plaintiffs owned. Following a brief period of negotia-
tion, Timothy Lane, chief executive officer of Holiday
Inn, assured Jabara that the premises would be run as
a midscale hotel, such as a Holiday Inn.5
In a memorandum dated June 5, 1996, Lane outlined
the nature of the transaction to the executive committee
of Bass PLC:6 ‘‘[The premises] [were] purchased most
recently by the Meyer and Jabara Hotel Group . . .
who had previously purchased and renovated the . . .
Marriott. . . . [Holiday Inn] was offered the asset for
$8.3 [million] with a deed restriction barring upscale
branding, including Crowne Plaza, for a term of 15
years. . . . The [fifteen year] deed restriction against
branding of the hotel as an upscale brand could limit
sale options in the future, but is not considered a signifi-
cant concern.’’
The plaintiffs and Holiday Inn reached an agreement7
on the sale of the premises on June 21, 1996, and the
closing occurred on July 12, 1996. On July 12, 1996, the
plaintiffs transferred their land interests in the prem-
ises, which included a sublease interest to a large parcel
of land and a fee interest to a small parcel, to Holiday
Inn.8 The sublease interest was transferred pursuant to
a sublease assignment agreement, and the fee interest
was transferred by way of a limited warranty deed.
Both the sublease assignment agreement and the lim-
ited warranty deed contained a restrictive covenant,
prohibiting Holiday Inn from using the premises to oper-
ate an ‘‘upscale hotel.’’
The transaction included a second phase as well. The
sublease, which the plaintiffs transferred to Holiday Inn
on July 12, 1996, was governed by a ground lease in
favor of a third party, TK Associates. On July 22, 1996,
the plaintiffs acquired the ground lease from TK Associ-
ates, and transferred the ground lease to Holiday Inn
on July 27, 1996, by way of a ground lease assignment
agreement. Under the terms of the ground lease assign-
ment agreement, the parties agreed that the sublease
and ground lease interests would merge. No restrictive
covenant was included in the ground lease assignment
agreement. Following the sale of the premises, the plain-
tiffs dissolved the business entity that owned the prem-
ises, i.e., BRS Realty Associates, LLC (BRS).
In conformity with the restrictive covenant, Holiday
Inn converted the premises into a Holiday Inn Select.
In 1997, Holiday Inn merged with the Bristol Hotel Com-
pany, which in turn merged with FelCor Lodging Trust
in 1998. In 2005, the ground lease for the premises
was transferred to the defendant, a taxable real estate
investment trust. There is no dispute on appeal that the
defendant is Holiday Inn’s corporate successor, and
that the defendant assumed Holiday Inn’s contractual
obligations.9
At trial, Jabara testified that in 1999, he received a
telephone call from Thomas Corcoran, the chairman
or president of the defendant, who requested that the
restrictive covenant be lifted so that the premises could
be used as a Crowne Plaza—an upscale hotel. Jabara
testified that he rejected the request after consulting
with the other plaintiffs. According to Jabara, Corcoran
made a similar request in late 2005, but the plaintiffs
denied it.
In 2005, the defendant received an offer to purchase
the premises from Destination Hotel and Resorts for
$30 million. This offer, however, was withdrawn when
Destination Hotel and Resorts learned of the restrictive
covenant. In response, the defendant consulted with
Garret Delehanty, Jr., a real estate attorney. Delehanty
advised the defendant that there was a ‘‘good argument’’
to be made that the restrictive covenant in the sublease
was merged out of existence when the sublease interest
merged with the ground lease. Delehanty offered to
record a document on the Stamford land records that
stated that the restrictive covenant was ‘‘terminated.’’
On May 25, 2006, the defendant recorded a document
entitled ‘‘Termination’’ on the Stamford land records
without notice to the plaintiffs.
The plaintiffs learned of the termination filing after
they discovered marketing materials associated with
the premises, which informed prospective buyers that
‘‘ownership recently took steps . . . [and] eliminated
a use restriction (which historically impaired the ability
to re-brand with most upscale brands).’’ The plaintiffs
thereafter sent written objections to the defendant con-
cerning the attempted termination of the restrictive cov-
enant, and requested that the termination document
filed in the Stamford land records be withdrawn. The
defendant did not withdraw the termination document.
On July 12, 2006, the plaintiffs and HD Hotel com-
menced this action seeking a declaratory judgment that
the restrictive covenant was valid, binding, and enforce-
able. The operative complaint consisted of four counts.
In the first count, the plaintiffs sought a declaratory
judgment that (1) the termination document filed on the
land records was null and void, and (2) the restrictive
covenant was valid, effective, and enforceable. In the
second count, HD Hotel sought a declaratory judgment
that it was the intended beneficiary of the restrictive
covenant, and that it was entitled to enforce the restric-
tion. In count four, both the plaintiffs and HD Hotel
alleged that they were entitled to an award of attorney’s
fees pursuant to provisions in the sublease assignment
agreement and the ground lease assignment
agreement.10
The defendant denied the material allegations of the
complaint and raised several special defenses including
that (1) the plaintiffs lacked standing to enforce the
restrictive covenant, and (2) the restrictive covenant
had been ‘‘merged out of existence.’’ In addition, by way
of a counterclaim, the defendant alleged (1) tortious
interference with contract or business expectations, (2)
slander of title, and (3) a violation of the Connecticut
Unfair Trade Practices Act. By agreement the trial was
bifurcated. Trial on the issues raised by the complaint
and the defendant’s special defenses commenced on
April 17, 2012. Following the presentation of evidence,
the parties submitted posttrial memoranda, and on
November 9, 2012, the court filed its memorandum of
decision.
In a thorough and persuasive memorandum of deci-
sion, the court found in favor of the plaintiffs on their
and HD Hotel’s declaratory judgment claims. The court
found the plaintiffs had standing to enforce the restric-
tive covenant. The court also found that HD Hotel, as
owner of the Marriott, had standing as the intended
beneficiary of the restrictive covenant.
The court found that the restrictive covenant was
valid and enforceable. The court rejected the defen-
dant’s argument that the restrictive covenant was
‘‘merged out of existence,’’ concluding that ‘‘the lan-
guage [that merged the sublease into the ground lease],
while clear as far as it goes, says nothing about the
[restrictive covenant], and is ambiguous as to its
intended effect, if any, on that restriction.’’ The court
determined that extrinsic evidence supported ‘‘the firm
conclusion that neither BRS nor [Holiday Inn] had any
intent to terminate the use restriction on the hotel par-
cel of land when they executed the ground lease
agreement.’’
After the court found in favor of the plaintiffs and
HD Hotel on their declaratory judgment claims, the
plaintiffs filed a motion for attorney’s fees. On June 27,
2013, the court filed a separate decision and awarded
attorney’s fees and legal costs to the plaintiffs in the
amount of $1,507,266.04. The plaintiffs moved for judg-
ment to be rendered in their favor, but before the court
ruled on that motion, this appeal was filed.11
I
The defendant first claims that the trial court improp-
erly determined that the plaintiffs had standing to
enforce the restrictive covenant. The defendant states
that none of the parties were ‘‘signatories or otherwise
named in any of the crucial documents’’ and that no
party was expressly named as a third party beneficiary.
Specifically, the defendant contends that upon the dis-
solution of BRS, the plaintiffs were divested of all rights
and title in the premises, and that HD Hotel was not
an intended third party beneficiary of the restrictive
covenant. We disagree with the defendant.
It is well established that ‘‘[s]tanding is the legal right
to set judicial machinery in motion. One cannot right-
fully invoke the jurisdiction of the court unless he [or
she] has, in an individual or representative capacity,
some real interest in the cause of action, or a legal or
equitable right, title or interest in the subject matter of
the controversy. . . . Nevertheless, [s]tanding is not
a technical rule intended to keep aggrieved parties out
of court; nor is it a test of substantive rights. Rather it
is a practical concept designed to ensure that courts
and parties are not vexed by suits brought to vindicate
nonjusticiable interests and that judicial decisions
which may affect the rights of others are forged in
hot controversy, with each view fairly and vigorously
represented. . . . If a party is found to lack standing,
the court is without subject matter jurisdiction to deter-
mine the cause. . . . A determination regarding a trial
court’s subject matter jurisdiction is a question of law.
When . . . the trial court draws conclusions of law,
our review is plenary and we must decide whether its
conclusions are legally and logically correct and find
support in the facts that appear in the record.’’ (Citation
omitted; internal quotation marks omitted.) Fairchild
Heights Residents Assn., Inc. v. Fairchild Heights, Inc.,
310 Conn. 797, 820, 82 A.3d 602 (2014).
A
We begin by analyzing whether the plaintiffs have
standing to prosecute this action. The trial court deter-
mined that although BRS had been dissolved, ‘‘the right
to enforce the use restriction passed to [the plaintiffs]
by operation of [General Statutes] § 34-210.’’12
The defendant contends that the restrictive covenant
did not pass to the plaintiffs. This argument rests, in
part, on the testimony at trial of James Mazzeo, formerly
the chief financial officer of BRS. Mazzeo testified that
BRS never listed the restrictive covenant as an asset
of BRS nor assigned the restrictive covenant a cash
value. Seizing on this fact, coupled with the fact BRS
never granted its members the right to continue BRS’
business following its dissolution, the defendant main-
tains that ‘‘the former members of BRS acquired no
interest of their own in the restrictive covenant, and
therefore lacked standing to enforce it.’’
On the basis of our plenary review of the record, we
conclude that the trial court properly determined that
the plaintiffs have standing. In effect, the defendant’s
argument invites this court to conclude, essentially, that
the plaintiffs had abandoned their interest in the restric-
tive covenant following the dissolution of BRS, or that
it simply evaporated. We decline this invitation. The
mere fact that some assets of BRS were not formally
assigned or transferred does not mean that they have
disappeared or that they did not pass to its members.
This is particularly true given that the restrictive cove-
nant at issue in this case was of considerable value to
the plaintiffs as owners of the Marriott. See generally
Torrington Creamery v. Davenport, 126 Conn. 515, 521,
12 A.2d 780 (1940) (recognizing restrictive covenant as
‘‘valuable asset’’ whose benefits may be assigned).
Upon the dissolution and winding-up of BRS, the
restrictive covenant passed to the plaintiffs. Pursuant
to § 34-210, following the satisfaction of its creditors,
the assets of a limited liability company are ultimately
transferred to its former members. In the context of
corporate law, the general rule is that ‘‘[w]hen a corpo-
ration is dissolved and its affairs wound up, such assets
as remain, after the satisfaction and discharge of all
liabilities and obligations, belong to the shareholders.’’
M. Ford, Connecticut Corporation Law & Practice (2d
Ed. 2000) § 4.01 (C), p. 4-12; see also Mukon v. Gollnick,
151 Conn. App. 126, 131–32, A.2d. (2014);13 Had-
dad v. Francis, 40 Conn. Supp. 567, 572–73, 537 A.2d
174, 177 (1986), aff’d, 13 Conn. App. 324, 536 A.2d
597 (1988).
Accordingly, even if the restrictive covenant was not
explicitly transferred out of BRS at the time of dissolu-
tion, it is apparent that the restrictive covenant passed
to the plaintiffs as its former members by operation of
law. Therefore, the plaintiffs have standing to enforce
the restrictive covenant.
B
We now turn to the defendant’s contention that HD
Hotel lacks standing as a third party beneficiary to bring
this action. The trial court found that HD Hotel owned
the Marriott and that the ‘‘[t]here was substantial and
uncontradicted testimony that the purpose of the use
restriction was to protect the business of the . . . Mar-
riott.’’ The defendant contends that this finding is
unsupported by the evidence because there is no evi-
dence ‘‘that Holiday Inn or its attorneys knew that HD
Hotel even existed as a specific entity,’’ and that the
finding is improperly based on the trial court’s focus on
the Heyman, Jabara, and Meyer families. We disagree.
Our Supreme Court has stated: ‘‘Under the third party
beneficiary doctrine, [t]he ultimate test to be applied
[in determining whether a person has a right of action
as a third party beneficiary] is whether the intent of
the parties to the contract was that the promisor should
assume a direct obligation to the third party [benefi-
ciary] . . . . [T]hat intent is to be determined from
the terms of the contract read in the light of the circum-
stances attending its making, including the motives
and purposes of the parties. . . . [I]t is not in all
instances necessary that there be express language in
the contract creating a direct obligation to the claimed
third party beneficiary . . . .’’ (Emphasis added; inter-
nal quotation marks omitted.) Wykeham Rise, LLC v.
Federer, 305 Conn. 448, 474, 52 A.3d 702 (2012).
On the basis of our review of the record, we conclude
that the trial court properly determined that HD Hotel
had standing to bring this action. In this case, there
was uncontradicted evidence that the intended benefi-
ciary of the restrictive covenant was the Marriott, and
that the restrictive covenant was meant to protect the
business interests of the plaintiffs as its owners. The
evidence indicated that the Marriott was owned by HD
Hotel, whose membership was comprised of the
plaintiffs.
The defendant contends that Holiday Inn was not
explicitly aware that HD Hotel owned the Marriott when
the restrictive covenant was executed. This argument
elevates form over substance. It is apparent that the
defendant clearly understood who owned the Marriott.
In 1999 and 2005, when the defendant wanted to have
the restrictive covenant removed, the defendant knew
exactly whom to contact and discussed the request with
Jabara. We agree with the trial court that ‘‘[t]here was
substantial and uncontradicted testimony that the pur-
pose of the [restrictive covenant] was to protect the
business of the . . . Marriott.’’ This testimony included
that of David Sinyard, who as the trial court noted,
‘‘described himself as the ‘lead deal guy’ for [Holiday
Inn] in connection with its 1996 purchase of the [prem-
ises],’’ and who testified that ‘‘[Holiday Inn] agreed to
the restriction, knew it was for the benefit of the . . .
Marriott, and was ‘fine with it’. . . .’’
On the basis of the entire record, it is clear that the
Marriott was an intended beneficiary of the restrictive
covenant and that, HD Hotel, as the owner of Marriott,
has standing to enforce the restrictive covenant.
II
We now address the defendant’s claim that the trial
court improperly determined that the restrictive cove-
nant was not merged out of existence when the sublease
interest was merged with the ground lease interest.
A review of the relevant facts is necessary for the
resolution of this claim. In the summer of 1996, the sale
of the premises from the plaintiffs to Holiday Inn was
governed by a purchase and sale agreement that was
executed on June 21, 1996. The agreement contem-
plated a two phase transaction. In the first phase, the
agreement provided that the plaintiffs were to transfer
their interests in the premises. These interests included
a sublease interest to the main parcel on which the
hotel structure rested, and a fee interest to a separate
smaller parcel that included the premises’ front land-
scape. The agreement granted the plaintiffs the right to
include in both the sublease assignment agreement and
the limited warranty deed to the fee parcel, a restrictive
covenant that precluded the premises from being used
for an upscale hotel. This first phase was completed
when the plaintiffs transferred the sublease interest
pursuant to a sublease assignment agreement and the
fee interest under a limited warranty deed on July 12,
1996, both of which included the restrictive covenant.14
The agreement recognized that the sublease was gov-
erned by a ground lease in favor of a third party, TK
Associates, and therefore contemplated a second phase:
if the plaintiffs acquired the ground lease from TK Asso-
ciates within twelve months, the plaintiffs were obli-
gated to assign that interest to Holiday Inn in exchange
for $1.6 million. On July 15, 1996, the plaintiffs acquired
the ground lease from TK Associates, and, pursuant to
the agreement, assigned the ground lease to Holiday
Inn on July 31, 1996. The assignment of the ground
lease was accomplished by a ground lease assignment
agreement, which not only transferred the ground lease
to Holiday Inn, but also operated to merge the sublease
interest with the ground lease interest.
Paragraph 6 of the ground lease assignment
agreement provided: ‘‘By and upon delivery of this
Assignment by Assignor to Assignee, all of the right,
title, interests and estate created by or under the Sub-
lease are automatically fully merged and subsumed into
the estate and interests held by Assignee under the
Lease, Assignee hereby declaring its express intent to
accomplish such merger so that from and after the
date hereof neither the Sublease nor the estate created
thereunder shall have any further existence and Assign-
ee’s interest in the Property shall be solely and exclu-
sively the leasehold estate under the Lease acquired by
Assignee hereunder and created by the Lease, the same
being the interest and estate of Assignee as lessee under
the Lease. The Sublease and interests and estates there-
under are hereby fully and completely merged, and
declared to be merged, out of existence, without the
necessity of any further action by any party.’’ (Empha-
sis added.)
We turn now to the defendant’s claim on appeal. The
parties are in agreement that paragraph 6 of the ground
lease assignment agreement (paragraph 6) operated to
merge the sublease estate with the ground lease. The
parties disagree, however, as to the effect of paragraph
6 on the restrictive covenant. The defendant contends
that the language at issue unambiguously merged the
sublease estate—and all interests thereunder, including
the restrictive covenant—out of existence. The plain-
tiffs, on the other hand, argue that the language of
paragraph 6 is ambiguous as to its impact on the restric-
tive covenant. The plaintiffs contend that given this
ambiguity, the trial court properly considered extrinsic
evidence when it found that the parties never intended
to extinguish the restrictive covenant. We agree with
the plaintiffs.
It is well established that the determination of
whether language of a contract is plain and unambigu-
ous ‘‘is a question of law subject to plenary review.’’
Cruz v. Visual Perceptions, LLC, 311 Conn. 93, 101, 84
A.3d 828 (2014). If, however, the contractual language
is found to be ambiguous, ‘‘[s]uch ambiguity permits
the trial court’s consideration of extrinsic evidence as
to the conduct of the parties. . . . [T]he trial court’s
interpretation of a contract, being a determination of
the parties’ intent, is a question of fact that is subject
to reversal on appeal only if it is clearly erroneous.’’
(Citation omitted; internal quotation marks omitted.)
19 Perry Street, LLC v. Unionville Water Co., 294 Conn.
611, 623, 987 A.2d 1009 (2010). Accordingly, our review
is twofold. First, we must determine de novo whether
the contractual language is ambiguous. If we conclude
that it is, we must determine whether the trial court’s
factual finding are clearly erroneous.
‘‘In determining whether a contract is ambiguous, the
words of the contract must be given their natural and
ordinary meaning. . . . A contract is unambiguous
when its language is clear and conveys a definite and
precise intent. . . . The court will not torture words
to impart ambiguity where ordinary meaning leaves no
room for ambiguity. . . . Moreover, the mere fact that
the parties advance different interpretations of the lan-
guage in question does not necessitate a conclusion
that the language is ambiguous. . . .
‘‘In contrast, a contract is ambiguous if the intent of
the parties is not clear and certain from the language
of the contract itself. . . . [A]ny ambiguity in a contract
must emanate from the language used by the parties.
. . . The contract must be viewed in its entirety, with
each provision read in light of the other provisions . . .
and every provision must be given effect if it is possible
to do so. . . . If the language of the contract is suscepti-
ble to more than one reasonable interpretation, the
contract is ambiguous.’’ (Citations omitted; internal
quotation marks omitted.) Cruz v. Visual Perceptions,
LLC, supra, 311 Conn. 102–103.
Our examination of paragraph 6 convinces us that it
is not clear and unambiguous. Whereas the very first
sentence of that paragraph states that ‘‘[upon this
assignment] all of the right, title, interests and estate
created by or under the Sublease are automatically fully
merged and subsumed into the estate and interests
[under the ground lease],’’ the very last sentence of
paragraph 6 states that ‘‘[t]he Sublease and interests
and estates thereunder are hereby fully and completely
merged, and declared to be merged, out of existence
. . . .’’ (Emphasis added.)
The defendant’s interpretation unduly focuses on the
very last sentence of paragraph 6, which states that the
sublease and interests thereunder were merged out of
existence, and ignores the broader context of the trans-
action. The defendant contends that this sentence
clearly and unequivocally evidences the parties’ intent
to extinguish the restrictive covenant. This sentence,
however, is in conflict with the first sentence of para-
graph 6, which states that the sublease and its interests
are ‘‘subsumed’’ by the ground lease. Therefore, it
appears that paragraph 6 is open to two reasonable
interpretations: one in which the restrictive covenant
is extinguished; the other in which it is subsumed by the
ground lease. These contradictory sentences—coupled
with the fact that neither specifically references the
restrictive covenant—leads us to the conclusion that
paragraph 6 does not plainly and unambiguously sup-
port the defendant’s contention that the restrictive cov-
enant was merged out of existence or the plaintiffs’
position that it was not.
We are unable to reconcile these two sentences.
Accordingly, on the basis of our plenary review, we
conclude that the language of paragraph 6 is ambiguous
because it is susceptible to more than one reasonable
interpretation. See United Illuminating Co. v. Wisvest-
Connecticut, LLC, 259 Conn. 665, 671, 791 A.2d 546
(2002). Therefore, we must determine whether the trial
court’s finding that paragraph 6 did not merge the
restrictive covenant out of existence is clearly
erroneous.
‘‘[T]he trial court’s interpretation of a contract, being
a determination of the parties’ intent, is a question of
fact that is subject to reversal on appeal only if it is
clearly erroneous. . . . A finding of fact is clearly erro-
neous when there is no evidence in the record to sup-
port it . . . or when although there is evidence to
support it, the reviewing court on the entire evidence
is left with the definite and firm conviction that a mis-
take has been committed.’’ (Citation omitted; internal
quotation marks omitted.) 19 Perry Street, LLC v.
Unionville Water Co., supra, 294 Conn. 623–24.
In finding that paragraph 6 did not merge the restric-
tive covenant out of existence, the trial court consid-
ered the following evidence. The court first noted the
importance of the restrictive covenant to the entirety
of the sale. The court found that principals of both the
plaintiffs and Holiday Inn understood that the restric-
tive covenant was an essential component to the overall
transaction. The court credited Jabara’s testimony that
the restrictive covenant was an essential condition of
the sale of the premises to Holiday Inn and quoted
the Lane memorandum before finding that Holiday Inn
‘‘clearly understood’’ the importance of the restrictive
covenant.
The court also examined the purchase and sales
agreement. It noted that the purchase and sales
agreement governed the entire transaction, and that
‘‘[t]here was no mention that upon assignment of the
ground lease [to Holiday Inn] the carefully negotiated
[restrictive covenant] would disappear.’’ The court also
noted that the ground lease assignment agreement,
which the defendant claimed to have merged the restric-
tive covenant out of existence, did not reference the
limited warranty deed that contained an identical
restrictive covenant.
The court next concluded that the testimony and
depositions of representatives from both the plaintiffs
and Holiday Inn who were involved with the transaction
‘‘consistently supported’’ an intent that the ground lease
assignment agreement was not intended to extinguish
the restrictive covenant. This testimony included that
of Kathleen Rorick, the executive vice president of Hey-
man Properties, who testified that she had ‘‘no authority
from [the plaintiffs] to terminate the [restrictive cove-
nant],’’ ‘‘did not intend to do so,’’ and ‘‘understood at
the time that the ground lease assignment [agreement]
did not do so.’’ Tamara Levine, an attorney who repre-
sented the plaintiffs in connection with the transaction,
testified that ‘‘the ground lease assignment [agreement]
was to have no effect on the [restrictive covenant], and
there was no intent to have the ground lease assignment
[agreement] affect the restriction.’’15
The court noted that a similar intent was evidenced
by Holiday Inn’s agents. The court recounted: ‘‘Sinyard,
who headed up the transaction for [Holiday Inn], testi-
fied at a deposition that [Holiday Inn] agreed to the
[restrictive covenant], understood it was to protect
another hotel in the area owned by the sellers, and
stated [that] [Holiday Inn] had no intention of making
the hotel it was acquiring into an ‘upscale’ hotel, but
was satisfied to call it a Holiday Inn. He testified [that]
he was unaware of any agreement by which that restric-
tion was terminated. He further testified that he had
not authorized its termination, and since the restrictive
covenant was a significant aspect of the transaction,
the termination of it less than a month thereafter would
have been brought to his attention. Attorney Timothy
Packenham, a commercial real estate lawyer with the
law firm Alston & Bird that acted as [Holiday Inn’s]
outside counsel in connection with its purchase of the
hotel, drafted the ground lease assignment [agreement],
and he had no knowledge of any [Holiday Inn] intent
with respect to that document except to acquire the
ground leasehold interest, and [did] not recall any intent
one way or another about terminating the [restrictive
covenant].’’ (Citations omitted.)
On the basis of these findings, the court came to ‘‘the
firm conclusion that neither [the plaintiffs] nor [Holiday
Inn] had any intent to terminate the [restrictive cove-
nant] on the hotel parcel of land when they executed
the ground lease assignment [agreement]. There is no
evidence of such intent and such an intent seems to be
an implausible change of direction by the parties who
knew about the distinct possibility of the ground lease
assignment when the [purchase and sales agreement]
was signed on June 21, 1996, and when the deed and
sublease assignment documents, all containing the
restriction, were signed on July 12, 1996. There is no
evidence of any event or change of heart occurring
within the nineteen day period extending to July 31,
1996, to provide a basis for the court to determine that
the [restrictive covenant] was intended by the parties
to be undone, so that the language of the ground lease
assignment [agreement] should be construed to effect
a termination of the [restrictive covenant], and the court
declines to do so.’’
Having reviewed the record and evidence, we con-
clude that it overwhelmingly indicates that the parties
never intended to extinguish the restrictive covenant.
The defendant’s interpretation rests on its laser like
focus on a single sentence of the ground lease assign-
ment agreement, and its contention that this sentence
indicates that the parties’ intended to undo a fundamen-
tal aspect of the transaction. This position does not
make sense when one considers the transaction as a
whole, which was neatly governed by the purchase and
sales agreement. There is no evidence in the plain lan-
guage of purchase and sales agreement indicating that
the parties intended to extinguish the restrictive cove-
nant upon the transfer of the ground lease, even though
the purchase and sales agreement contemplated the
ground lease assignment agreement.
On the basis of our review of the record, we simply
cannot conclude that the trial court’s findings were
without support in the record, nor are we ‘‘left with the
definite and firm conviction that a mistake has been
committed.’’ (Internal quotation marks omitted.) 19
Perry Street, LLC v. Unionville Water Co., supra, 294
Conn. 624. Accordingly, we conclude that the trial
court’s determination that the restrictive covenant was
not merged out of existence is not clearly erroneous.
III
The defendant next claims that the court improperly
granted the plaintiffs an award of attorney’s fees. Specif-
ically, the defendant contends that the court improperly
determined that (1) the plaintiffs were contractually
entitled to attorney’s fees, (2) the defendant’s breach of
the restrictive covenant triggered an award of attorney’s
fees, and (3) the plaintiffs had standing to pursue attor-
ney’s fees because the plaintiffs did not pay for the cost
of the litigation. We disagree.
The following facts are relevant to this claim. In the
fourth count of their amended complaint, the plaintiffs
and HD Hotel alleged that they were entitled to reason-
able attorney’s fees and expenses arising out of the
defendant’s breach of the restrictive covenant. After
the court found that the restrictive covenant was
enforceable, the plaintiffs filed a motion for attorney’s
fees and litigation expenses.
The plaintiffs claimed entitlement to attorney’s fees
on the basis of the sublease assignment agreement,16
which provided: ‘‘[Holiday Inn] agrees to and does
hereby indemnify and hold [BRS] harmless hereunder
from all claims, demands, losses, damage, expenses and
costs including, but not limited to, reasonable attorney’s
fees and expenses arising out of or in connection with
[Holiday Inn’s] failure, from and after delivery of this
instrument, to observe, perform and discharge on time
each and every one of the covenants, obligations and
liabilities assumed by [Holiday Inn] in this instrument
relating to, or accruing with respect to the period from
and after, not before the date hereof.’’
In their motion for attorney’s fees the plaintiffs
claimed, inter alia, that the defendant’s filing the termi-
nation notice on the Stamford land records was a repu-
diation of the restrictive covenant. The plaintiffs sought
$1,507,266.04 in attorney’s fees and expenses for an
expenditure of over 4000 hours of attorney time in the
prosecution of the declaratory judgment action.
The defendant opposed the plaintiffs’ motion for
attorney’s fees, and claimed that an award of attorney’s
fees was not supported because (1) there was no con-
tractual or statutory basis for doing so, (2) the defen-
dant had not breached any contractual agreement, (3)
the plaintiffs lacked standing to seek attorney’s fees
because HD Hotel ultimately paid the bills, and (4) the
amount of recovery sought was unreasonable and
unfair.
On June 27, 2013, the court filed its memorandum of
decision and awarded the plaintiffs attorney’s fees and
litigation costs in the amount of $1,507,266.04. The court
found that ‘‘the actual language of the contractual provi-
sions in the [sublease assignment agreement] and
[ground lease assignment agreement] that comprise the
undertaking to pay attorney’s fees make no specific
reference that they are, as [the defendant] has urged,
limited only to such instances where a third party has
sued BRS. . . . Under these agreements, [Holiday Inn],
and subsequently [the defendant], obligated itself to pay
to BRS all expenses and costs BRS incurred, including
attorney’s fees arising from [the defendant’s] breach of
the restrictive covenant.’’ The court also found that
the defendant had breached the restrictive covenant
by filing the termination notice on the Stamford land
records and that the plaintiffs had standing to pursue
the claim for attorney’s fees.
A
We first analyze whether the court properly con-
cluded that the contractual language at issue supported
an award of attorney’s fees. As this claim requires an
examination of the language of the sublease assignment
agreement, our review is plenary. See Cruz v. Visual
Perceptions, LLC, supra, 311 Conn. 101. The dispositive
issue is whether the sublease assignment agreement
provides for indemnification for third party claims only,
or whether the language of that agreement also supports
an award of attorney’s fees between the contracting
parties themselves.17
In Amoco Oil Co. v. Liberty Auto & Electric Co., 262
Conn. 142, 810 A.2d 259 (2002), our Supreme Court
noted the difference between an action for indemnifi-
cation and a breach of contract claim. In that case,
Liberty Auto & Electric Company (Liberty) contracted
to install underground gasoline storage tanks for Amoco
Oil Company (Amoco). Id., 144. Eight years later, one
tank began to leak, and Amoco brought an ‘‘indemnifica-
tion’’ claim against Liberty under the following contract
provision: ‘‘Liability and Indemnity . . . [Liberty] shall
reimburse [Amoco] for, and indemnify [Amoco] and
hold it harmless from and against any and all loss, costs
(including reimbursement of all attorney fees and other
costs of defense), damage, expense, claims (including
claims of strict liability and for fault imposed by stat-
utes, rules or regulations), suits and liability on account
of any and all bodily injuries or death of any persons
(including the employees of [Amoco], [Liberty], or its
subcontractors) or damage to, or loss of destruction of
any property (including without limitation, the work
covered hereunder and the property of [Liberty], and
subcontractors and [Amoco]) arising directly or indi-
rectly out of or in connection with the performance of
this Contract . . . .’’ (Footnotes omitted; internal quo-
tation marks omitted.) Id., 144–45.
Liberty contended that the claim was not an action
for indemnification, but rather, was a breach of contract
action that was barred by the statute of limitations. Id.,
146–47. In characterizing the nature of the claim for
statute of limitations purposes, our Supreme Court
observed that ‘‘[t]he logic and rationale underlying our
indemnity case law are based on the premise that an
action for indemnification is one in which one party
seeks reimbursement from another party for losses
incurred in connection with the first party’s liability to
a third party. In the present action, however, Amoco
does not seek indemnification for losses arising from
liability to a third party.’’ (Emphasis added.) Id.,148–49.
The court noted that ‘‘the concept of indemnity usually
involves an indemnitor, A, and an indemnitee, B, who
enter into a contract whereby A agrees to indemnify B
for any money B becomes legally obligated to pay to a
third party.’’ (Emphasis omitted.) Id.,149.
Our Supreme Court determined that the claim raised
by Amoco was not an action for indemnification:
‘‘Amoco cannot convert, for purposes of determining
the applicable statute of limitations and accrual date,
what otherwise is a breach of contract claim into an
indemnification claim simply by labeling it as such in
the pleadings. Although Amoco seeks ‘indemnification’
from Liberty in the first count of its complaint, Amoco
effectively seeks enforcement of a specific contract
provision that provides reimbursement for loss. Thus,
the claim that Amoco asserts in count one of its com-
plaint constitutes a breach of contract claim and,
accordingly, [General Statutes] § 52-576 (a) furnishes
the applicable statute of limitations.’’ Id., 152. Because
our Supreme Court determined that the action was
barred by the statute of limitations, it never analyzed
the merits of the breach of contract claim.
In Total Recycling Services of Connecticut, Inc. v.
Connecticut Oil Recycling Services, LLC, Superior
Court, judicial district of Middlesex, Docket No. CV-06-
50000447-S (November 30, 2009), the trial court consid-
ered the motion of Connecticut Oil Recycling Services,
LLC (Connecticut Oil) for attorney’s fees based on an
agreement effecting the sale of the oil recycling busi-
ness of Total Recycling Services of Connecticut, Inc.
(Total Recycling) to Connecticut Oil. The operative pro-
vision stated: ‘‘[Total Recycling] agrees to indemnify
and hold [Connecticut Oil] harmless from any costs or
damages, including reasonable attorney’s fees, resulting
from any breach of any representation, warranty or
covenant in this agreement.’’ Id.
The court held that the provision had the ‘‘plain mean-
ing’’ of obligating Total Recycling to compensate Con-
necticut Oil for any costs plus reasonable attorney’s
fees resulting from Total Recycling’s breaches of the
sales agreement. Id. The court denied the motion for
attorney’s fees, however, because it could not identify
which attorney’s fees were related to Connecticut Oil’s
prosecution of its breach of contract claims. Id. The
denial of the motion was appealed, and it was affirmed
by this court. See Total Recycling Services of Connecti-
cut, Inc. v. Connecticut Oil Recycling Services, LLC,
129 Conn. App. 296, 305, 20 A.3d 716 (2011), rev’d,
308 Conn. 312, 63 A.3d 896 (2013). Our Supreme Court
reversed this court’s judgment, however, and deter-
mined that when some contractual provisions call for
recovery of attorney’s fees and others do not, a party
is entitled to recover all reasonable fees ‘‘if apportion-
ment is impracticable because the claims arise from a
common nucleus and are intertwined.’’ Total Recycling
Services of Connecticut, Inc. v. Connecticut Oil Recycl-
ing Services., LLC, 308 Conn. 312, 333, 63 A.3d 896
(2013). Our Supreme Court never analyzed the trial
court’s interpretation of the contract.
On the basis of our review of the existing case law,
our Supreme Court has decided that an action for
indemnification is ‘‘one in which one party seeks reim-
bursement from another party for losses incurred in
connection with the first party’s liability to a third
party.’’ Amoco Oil Co. v. Liberty Auto & Electric Co.,
supra, 262 Conn. 148. Less clear, however, is whether
contractual language like in the present case that uti-
lizes the phrase ‘‘indemnify and hold . . . harmless,’’
is limited to an action for indemnification, or whether
that language may support a claim between the con-
tracting parties.
Our review of the relevant case law does not suggest
that the language is talismanic and automatically dic-
tates that the provision allows only an action for indem-
nification limited to the coverage of only third party
claims. Rather, ‘‘[i]n reviewing a claim that attorney’s
fees are authorized by contract, we apply the well estab-
lished principle that [a] contract must be construed to
effectuate the intent of the parties, which is determined
from [its] language . . . interpreted in the light of the
situation of the parties and the circumstances con-
nected with the transaction.’’ (Internal quotation marks
omitted.) Total Recycling Services of Connecticut, Inc.
v. Connecticut Oil Recycling Services, LLC, supra, 308
Conn. 327. ‘‘[T]he intent of the parties is to be ascer-
tained by a fair and reasonable construction of the
written words and . . . the language used must be
accorded its common, natural, and ordinary meaning
and usage where it can be sensibly applied to the subject
matter of the [writing].’’ (Internal quotation marks omit-
ted.) Connecticut National Bank v. Rehab Associates,
300 Conn. 314, 319, 12 A.3d 995 (2011).
In this case, on the basis of our plenary review, we
conclude that the plain language of the sublease assign-
ment agreement supports the plaintiffs’ contention that
the provision is not limited to third party claims.
According to Black’s Law Dictionary, ‘‘to indemnify’’ is
‘‘[t]o reimburse (another) for a loss suffered because
of a third party’s or one’s own act or default.’’ (Emphasis
added.) Black’s Law Dictionary (9th Ed. 2009); see also
1 D. Dobbs, Law of Remedies (2d Ed.1993), § 3.10 (3),
p. 402 (indemnity and hold harmless agreements ‘‘often
provide that one of the parties will protect the other
from litigation costs or claims brought by third persons
as well as from claims between themselves’’).
Given the broad language of the sublease assignment
agreement, which by its own terms is not expressly
limited to third party claims, we conclude that the provi-
sion allows for the recovery of attorney’s fees arising
from the defendant’s breach of the restrictive covenant.
The language clearly provides in relevant part: ‘‘[Holi-
day Inn] agrees to and does hereby indemnify and hold
[BRS] harmless hereunder from all . . . losses . . .
expenses and costs including, but not limited to, reason-
able attorney’s fees and expenses, arising out of . . .
[Holiday Inn’s] failure, from and after the delivery of
this instrument, to observe, perform, and discharge
. . . each and every one of the covenants . . .
assumed by [Holiday Inn] in this instrument . . . .’’
(Emphasis added.)
This interpretation is consistent with the circum-
stances of the parties, the nature of the restrictive cove-
nant, and the foreseeable claims that might accrue
under the sublease assignment agreement. If we were
to adopt the defendant’s interpretation, we would be,
in effect, judicially grafting a limitation that is not sup-
ported by the plain language of the indemnification
provision nor our case law.18
Moreover, the defendant’s interpretation would ren-
der portions of the indemnification provision superflu-
ous. We have long held that ‘‘[t]he law of contract
interpretation militates against interpreting a contract
in a way that renders a provision superfluous.’’ United
Illuminating Co. v. Wisvest-Connecticut, LLC, supra,
259 Conn. 674. The indemnification provision clearly
encompasses ‘‘expenses . . . arising out of . . . [Hol-
iday Inn’s] failure . . . to observe . . . each and every
one of the covenants . . . assumed by [Holiday Inn]
in this instrument . . . .’’ Among the covenants and
obligations undertaken by Holiday Inn in the ‘‘instru-
ment’’ was the restrictive covenant. In its memorandum
of decision, the trial court pragmatically observed that
‘‘it is hard to envision anybody but BRS being injured
by a breach of [the restrictive] covenant because it was
BRS’ interest in protecting the position of the neigh-
boring Marriott hotel that was the reason for including
the covenant in the agreements.’’ We agree. Only the
plaintiffs could be injured by a breach of the restrictive
covenant. Therefore, limiting that provision to encom-
pass only third party claims is illogical with respect to
the restrictive covenant because no third party could
ever reasonably claim to be injured by the defendant’s
breach of the restrictive covenant.
Given the broad language of the indemnification pro-
vision and the absence of any indication that it was
limited to third party claims, we conclude that the provi-
sion is not limited to third party claims, and that it
provides for an award of attorney’s fees between the
plaintiffs and the defendant for a breach of the restric-
tive covenant.
B
The defendant claims, as it did in the trial court, that
‘‘it did not breach any assumed obligation to warrant
an award of attorney’s fees and expenses.’’ Specifically,
the defendant argues that ‘‘the restrictive covenant was
not one of the assumed obligations arising out of the
sublease . . . [but rather] was a new, additional cove-
nant that was inserted only into the [sublease assign-
ment agreement], and never incorporated into the
sublease itself.’’
This claim is not persuasive. We agree with the trial
court that ‘‘[t]his is an unconvincing and tortuous inter-
pretation of the subject contracts.’’ It is manifestly clear
that the language of the sublease assignment agreement
provided for the award of costs ‘‘arising out of’’ the
failure to ‘‘perform . . . the covenants . . . assumed
by [Holiday Inn] in this instrument . . . .’’ (Emphasis
added.) Because the restrictive covenant was included
in the sublease assignment agreement, the argument
that the restrictive covenant was somehow not an
assumed obligation thereunder is entirely without
merit.
C
Finally, the defendant claims that the plaintiffs lacked
standing to pursue a claim for attorney’s fees. The
defendant claims that the plaintiffs were not parties to
contracts that gave rise to the claim for attorney’s fees,
and that they did not actually pay any of the attorney’s
fees or litigation costs in this case.
Although the plaintiffs were not parties to the sub-
lease assignment agreement that supported the court’s
award of attorney’s fees, we already have determined
that the right to enforce the restrictive covenant passed
to the plaintiffs as the former members of BRS upon
that entity’s dissolution. The defendant has failed to
demonstrate why the sublease assignment agreement
could not also be enforced by the plaintiffs after it
passed to the plaintiffs as an asset of BRS.
The defendant argues, finally, that the plaintiffs never
actually paid for the attorney’s fees and litigation costs
that were awarded by the trial court. This claim rests
on the fact that all of the plaintiffs’ litigation costs were
actually paid for by HD Hotel. This claim fails insofar
as HD Hotel’s members are comprised of the plaintiffs.
The plaintiffs’ respective share of ownership of HD
Hotel is very similar to that of BRS. Accordingly, it is
clear that the subject legal expenses were apportioned
among the plaintiffs, and that any expense paid by HD
Hotel was ultimately borne by the plaintiffs as its mem-
bers. The defendant’s claim fails.
The judgment is affirmed.
In this opinion the other judges concurred.
1
The plaintiffs are four business entities owned by three families: HD
Hotel, whose members are Heyman, owned by the Heyman family; AIM,
owned by the Meyer family; and TRJ, owned by the Jabara family. In this
opinion, we refer to Heyman, AIM, and TRJ, collectively as the plaintiffs,
and by name where appropriate. HD Hotel, although a plaintiff, will be
referred to by name.
2
Specifically, the defendant contends that a restrictive covenant that was
included in a sublease assignment agreement was merged out of existence
when the sublease was merged with the ground lease.
3
In 1994, the plaintiffs purchased the Marriot and operated the hotel as
HD Hotel. In 1996, the plaintiffs purchased the Ramada Inn, and operated
that hotel as BRS Realty Associates, LLC (BRS). Heyman, AIM, and TRJ
were members of both BRS and HD Hotel.
4
According to Jabara, an upscale hotel features more amenities and a
higher level of service. Typically, upscale hotels feature a doorman, ballroom,
pool, restaurant, and twenty-four hour room service. A midscale hotel, on
the other hand, such as a Holiday Inn, would have fewer services and focus
on the budget conscious traveler.
5
The trial court found that Holiday Inn operates three levels of hotels:
Crowne Plaza (upscale), Holiday Inn (midscale), and Holiday Inn Select
(focus on value).
6
In 1996, Holiday Inn was a wholly owned subsidiary of Bass PLC, a
British public limited company.
7
The transactional documents relative to the sale of the premises included
four documents whose nomenclature is similar. For clarity, these documents
will be referred to as follows. The overall transaction was governed by a
Purchase and Sales Agreement (purchase and sales agreement). The transfer
of the sublease interest in the premises from BRS Realty Associates, LLC
(BRS) to Holiday Inn was accomplished by way of an Assignment and
Assumption of Sublease Agreement (sublease assignment agreement). The
conveyance of the fee interest from BRS to Holiday Inn was executed by
way of a Limited Warranty Deed (limited warranty deed). The transfer of
the ground lease from BRS to Holiday Inn was completed by an Assignment
and Assumption of Lease Agreement and of Sublease Agreement (ground
lease assignment agreement).
8
The hotel structure and improvements were on two parcels of land. The
structure itself rested on a large parcel. This parcel was subject to a ground
lease in favor of TK Associates under which the plaintiffs held a sublease
interest. The front landscape of the hotel was on a smaller parcel, which
the plaintiffs held in fee simple.
9
The trial court found that pursuant to Delaware law, which governed
both the Holiday Inn-Bristol Hotel Company merger and the Bristol Hotel
Company-FelCor Lodging Trust merger, ‘‘a surviving corporation shall be
subject to all ‘restrictions, disabilities and duties of each of such corporations
so merged . . . .’ ’’ On appeal, the trial court’s finding is not challenged.
10
In the third count, the plaintiffs and HD Hotel sought an injunction
ordering the defendant to record a document on the Stamford land records
cancelling the termination document that the defendant filed on the land
records in 2006. This count was withdrawn when the restrictive covenant
lapsed in 2011.
11
Although a formal judgment had not been rendered when this appeal
was filed, the defendant has nonetheless appealed from a final judgment
insofar as at the time the appeal was taken the court had adjudicated the
entirety of the plaintiffs’ complaint. See Practice Book § 61-2 (judgment
rendered on entire complaint is final judgment).
12
General Statutes § 34-210 provides: ‘‘Upon the winding up of a limited
liability company, the assets shall be distributed as follows: (1) Payment,
or adequate provision for payment, shall be made to creditors, including,
to the extent permitted by law, members who are creditors, in satisfaction
of liabilities of the limited liability company; (2) unless otherwise provided
in writing in an operating agreement, to members or former members in
satisfaction of liabilities for distributions under sections 34-158 and 34-159;
and (3) unless otherwise provided in writing in an operating agreement, to
members and former members, first, for the return of their contributions
and second, respecting their membership interests, in proportions in which
the members share in distributions under section 34-158.’’
13
In Mukon v. Gollnick, supra, 151 Conn. App. 132, a panel of this court
stated: ‘‘The dissolution of a limited liability company does not . . . result
in the automatic transfer of the limited liability company’s assets to one of
the individual members. Instead, the dissolution necessitates a prescribed
winding-up process, and a member receives the limited liability company’s
property if, and only if, the member or manager winding-up the limited
liability has completed the applicable steps established by [the winding-
up statute].’’
This language does not supplant the general rule that after dissolution
and completion of the winding-up process the assets of a limited liability
company devolve to its members. In Mukon, we held that an asset of a
limited liability company did not transfer automatically and immediately at
the moment a limited liability company was dissolved because the subject
company had not completed the winding-up process, which in that case
involved the payment of deferred taxes. The present case is distinguishable
from Mukon insofar as BRS had been properly wound up, e.g., its liabilities
were satisfied, and its remaining assets thereafter devolved to its members.
14
The restrictive covenant provided: ‘‘Assignee by acceptance of this
Assignment covenants and agrees that it will neither operate nor permit the
operation of an ‘upscale hotel’ on premises herein conveyed. ‘Upscale hotel’
as used herein shall mean a hotel which caters to an upscale market, includ-
ing, without limitation, hotels currently catering to an upscale market such
as Marriot Hotels, Sheraton Hotels, Hilton Hotels, Omni Hotels, Crowne
Plaza, Wyndham Hotels, DoubleTree Hotels and Suites, and Embassy Suites.
This restriction shall not prevent Assignee from operating or permitting the
operation of a Holiday Inn Hotel, a Holiday Inn Select Hotel, a Holiday Inn
Express Hotel, a Radisson Hotel, or other hotels catering to the same market
currently served by these hotels. This restriction is intended to run with
the land and shall be binding upon Assignee, its successors and assigns. This
restriction shall expire fifteen (15) years from the date of this Assignment.’’
15
According to Levine, BRS had a right of first refusal under which it
could purchase the ground lease from TK Associates. She testified that
shortly before the plaintiffs and Holiday Inn executed the purchase and
sales agreement, TK Associates informed the plaintiffs that a third party
wanted to buy the ground lease. This forced the plaintiffs to decide whether
to exercise the right of first refusal. The purchase and sales agreement
was then amended to address the plaintiffs’ potential acquisition of the
ground lease.
Levine testified that the reason the ground lease was not acquired by the
plaintiffs prior to the July 12, 1996 closing was that they did not want to
purchase the ground lease before Holiday Inn had actually closed on the
transaction, and also that they wanted to use the funds from the July 12,
1996 closing to purchase the ground lease from TK Associates.
16
The plaintiffs claim a provision in the ground lease assignment
agreement also supports an award of attorney’s fees. That provision stated:
‘‘[Holiday Inn] hereby indemnifies and agrees to defend, and hold [BRS]
harmless from all claims, demands, liabilities, damages, loses or judgments,
including the defense thereto, including attorney’s fees and expenses, made
against or suffered by [BRS] which relate to any obligation of [Holiday Inn]
accruing, to be performed or arising out of events occurring on or after the
date hereof with respect to the Lease, the Sublease or the Property.’’
The defendant has not claimed that there is any meaningful difference
between the two provisions, and its arguments appear to apply equally to
both the language of the sublease assignment agreement and the ground
lease assignment agreement. Because we conclude that the sublease assign-
ment agreement supports the trial court’s award of attorney’s fees, we need
not examine the language of the ground lease assignment agreement in detail.
17
We note significant disparity among our sister states as to whether
language of indemnification covers losses between the contracting parties
themselves, or only as between a contracting party and a third party. Com-
pare Hooper Associates, Ltd. v. AGS Computers, Inc., 74 N.Y.2d 487, 492,
548 N.E.2d 903, 549 N.Y.S.2d 365 (1989) (‘‘inasmuch as a promise by one
party to a contract to indemnify the other for attorney’s fees incurred in
litigation between them is contrary to the well-understood rule that parties
are responsible for their own attorney’s fees, the court should not infer a
party’s intention to waive the benefit of the rule unless the intention to do
so is unmistakably clear from the language of the promise’’) with Battelle
Memorial Institute v. Nowsco Pipeline Services., Inc., 56 F. Supp. 2d 944,
951 (S.D. Ohio 1999) (‘‘it is clear from both the Ohio and Sixth Circuit
definitions of indemnification that a party wishing to narrow an indemnifica-
tion clause to third party damage is obligated to limit the scope of the clause
expressly; and absent such express limitation, indemnification clauses may
apply to damage suffered by the contracting parties themselves’’).
18
The defendant’s claim that the indemnification provision does not sup-
port an award of attorney’s fees between the parties rests on a misunder-
standing of our Supreme Court’s holding in Amoco Oil Co. In that case, the
defendant contends, our Supreme Court stated ‘‘unequivocally that indemni-
fication agreements apply to third party claims.’’ As we have observed
previously, Amoco Oil Co. was decided purely on a statute of limitations
issue. Our Supreme Court never analyzed whether the language of the indem-
nification provision in that case could support an award of attorney’s fees
between the contracting parties, because even if such a claim was supported,
the statute of limitations period for a breach of contract action had expired.