Cafe Ruche Loses Lawsuit Against Town of Wilton, Ordered to Pay Landlord $83,839

Cafe Ruche on Monday, Nov. 23, now closed.

Friday afternoon, Jan. 18, Superior Court Judge Anthony Truglia issued his decision in the lawsuit filed by Cafe Ruche against the Town of Wilton and two property management companies, finding not only in favor of the three defendants, but that Barbara Chopin, Cafe Ruche’s owner, was liable to pay damages to one of the defendants in the amount of $83,839.25.

GOOD Morning Wilton reached out to Chopin over the weekend to ask for her reaction and if she planned on filing an appeal:  “I haven’t discussed it fully with my legal team. The losers here are the citizens of Wilton. I may be able to comment more once I finish our internal discussions regarding appeal.”

Wilton’s First Selectwoman Lynne Vanderslice was happy with the outcome.  “We are pleased with the Court’s comprehensive decision which should put this matter to rest,” she said.

The case originated as a lawsuit filed by Chopin in May 2016 against the town, Wilton Center Development, LLC (WCD) and Paragon Realty Group, LLC after she closed her restaurant in the building on the Town Green (101 Old Ridgefield Rd.). Chopin alleged that oil seepage under the premises from an old, no-longer-used, underground oil storage tank caused a pervasive petroleum smell, and when the town’s Health Department found the cafe was a public health hazard and ordered it closed, she was forced to permanently close the business.

At one point in the suit leading up to trial, all the parties participated in mediation to resolve the case before it came before a judge. The three defendants made a settlement offer that they would share in paying to Chopin. While the amount that was offered was not disclosed, Chopin told GOOD Morning Wilton it was “insultingly low.” The offer was not accepted, and the case went to trial last summer.

By the time the trial began, all three defendants–the Town of Wilton, WCD and Paragon–had filed countersuits against Chopin, alleging that she violated the terms of her lease. All three defendants asked for damages to be awarded, including costs, attorneys fees and anything else the court saw fit. In addition, Paragon asked for the balance of rent owed and remediation costs.

Truglia found that the three defendants “acted reasonably.” In his decision he described multiple environmental assessments and reports which showed there was no environmental liability on the property.

“Both WCD and the town reasonably believed, as of 1991, that there was no UST on the property and, by extension, near the premises… The town and WCD acted reasonably in relying on the findings and recommendations of Langan that no further action with regard to possible adverse environmental conditions on the property was necessary after the 1991 investigations,” Truglia wrote, later adding that “evidence shows equally clearly that both parties had good cause to believe–and did believe–that whatever [tank] had been installed on the property had been removed or properly closed.”

Not only did Judge Truglia find that the three defendants were not at fault, he sided with Paragon in its countersuit against Chopin. That counterclaim alleged that during the time Chopin oversaw construction of the restaurant space prior to opening, one of the contractors who worked at the location cut one or more pipes and failed to cap them properly, causing the oil leak and the resulting smell. Despite Chopin’s legal team filing a motion denying that anyone from Cafe Ruche cut the pipes, the judge sided with Paragon, and ordered Chopin to pay Paragon $83,839.25 for costs the company incurred to investigate, test, remediate and remove any contaminated soil.

Property History and Timeline

The two buildings on the property were built some time in the late 1920s and used as a school until 1971, and then as offices for the Wilton Board of Education until 1983. According to the legal documents, it’s presumed that an underground  oil tank was installed when the buildings were built.

In 1983, the town leased the buildings to Wilton Center Development, which then began subletting spaces in the building to other businesses. In 1991, in order to secure financing, WCD was required to perform environmental testing and site assessment; in 2000 and again in 2009, for the same reason, WCD repeated the environmental site assessments. All three reports had similar findings–little to no impact from any presence of an underground storage tank. The last report conducted in 2009 recommended that, “…no further assessment or remediation is warranted at this site at this time.”

A final environmental assessment was conducted in 2015 when WCD transferred its management and lease rights to Paragon. Again it was found that, “based on earlier investigations and ‘site reconnaissance’ … that the tank removal would have also removed any residual petroleum impacted soil and therefore ‘the former fuel oil [underground tank] is not considered to have the potential to impact the [site’s] environmental integrity.'”

At no time did any of the companies that performed the assessments locate or identify the underground oil tank that actually did exist on the property. That was discovered after the oil smell started in 2015, when Langan Environmental Services was hired to investigate.

Chopin opened Cafe Ruche in December 2014 as a combination restaurant and yoga studio. Truglia’s decision states that the space was rented to Chopin and delivered to her “…with all interior walls and ceilings removed. The pipe that eventually leaked oil into the premises was clearly visible to Chopin and the plaintiff’s contractors when the plaintiff took possession.” According to the legal documents, the judge found that it was during construction of the space before Cafe Ruche opened that a contractor hired by Chopin cut a pipe connected to the storage tank, and it was that pipe “…that eventually leaked oil into the premises.” He concluded that the three defendants were not responsible.

He also notes that if the pipe had been cut before by one of WCD’s contractors, one of Chopin’s contractors “would certainly have noticed it.” Truglia also criticized Chopin for failing to keep any construction records or receipts. “The court draws an adverse inference from the plaintiff’s failure to retain any construction records…the plaintiff had discarded all contracts, correspondence, proposals, and scope of work documents from the plaintiff’s own contractors shortly before commencing this litigation.”

Countersuit

In April 2018, all three defendants–the Town of Wilton, WCD and Paragon–countersued Chopin. They asserted that Cafe Ruche or the cafe’s agent cut the pipes, not only causing the problem but creating a public nuisance, which violated the lease.

In addition, the three defendants claimed that Cafe Ruche’s actions resulted in the restaurant’s insurance being denied, which also violated the lease. Chopin was required by the lease to maintain insurance for property damage and refrain from doing anything which would void insurance coverage.

In fact, Chopin’s insurance company did turn down a claim she filed in November 2015, “for loss of income.” The insurer denied it on the grounds that a contractor was responsible and coverage excluded any “interruptions caused by ‘[f]aulty, inadequate or defective…workmanship, repair, construction, renovation, remodeling…'”

The judge believed the defendants’ claim that Cafe Ruche’s contractor did cut the pipes, and that act, plus failing to cap the pipes caused the damage. “Essentially, these actions caused the premises to be partially untenantable for several months and required Paragon to expend funds for investigation, testing, remediation and removal of potentially contaminated soil and concrete caused by the improper cutting of the pipe or pipes inside…” he wrote.

He called Paragon’s expenses of $83,839.25 “a direct result of the plaintiff’s contractor’s actions,” and Chopin was found liable for those costs.

Wilton will not recoup any legal fees or expenses, however; nor did the Town’s insurance policy cover the cost of defending the town. Vanderslice was not in the office over the weekend to provide an exact amount of what the suit cost the town, but she said legal fees over the two-plus years of litigation, including the trial, exceeded $40,000.