Justia Landlord - Tenant Opinion Summaries

A landlord, JJD-HOV Elk Grove, LLC (JJD), owns a shopping center in Elk Grove, California, and leased space to Jo-Ann Stores, LLC (Jo-Ann). The lease included a cotenancy provision allowing Jo-Ann to pay reduced rent if the number of anchor tenants or overall occupancy fell below a specified threshold. When two anchor tenants closed, Jo-Ann invoked this provision and paid reduced rent for about 20 months until the occupancy threshold was met again.The Sacramento County Superior Court ruled in favor of Jo-Ann, finding the cotenancy provision to be an alternative performance rather than a penalty. The Court of Appeal for the Third Appellate District affirmed this decision, distinguishing the case from a previous ruling in Grand Prospect Partners, L.P. v. Ross Dress For Less, Inc., which found a similar provision to be an unenforceable penalty.The Supreme Court of California reviewed the case to determine the validity of the cotenancy provision. The court held that the provision was a valid form of alternative performance, allowing JJD a realistic choice between accepting lower rent or taking steps to increase occupancy. The court found that the provision did not constitute an unreasonable penalty under California Civil Code section 1671, nor did it result in a forfeiture under section 3275. The court emphasized that contracts should be enforced as written, especially when negotiated by sophisticated parties.The Supreme Court of California affirmed the judgment of the Court of Appeal, upholding the cotenancy provision as a valid and enforceable part of the lease agreement. View "JJD-HOV Elk Grove, LLC v. Jo-Ann Stores, LLC" on Justia Law

Active Spine Physical Therapy, LLC (Active Spine) and its owners, Sara and Nicholas Muchowicz, were sued by 132 Ventures, LLC (Ventures) for breach of contract and personal guarantee after failing to pay rent and common area maintenance (CAM) charges under a lease agreement. Ventures had purchased the property in a foreclosure sale and sought damages for unpaid rent and CAM charges from June 2020 to February 2021. Active Spine argued that the lease was invalid due to fraudulent inducement and that they were under a COVID-19-related rent abatement.The district court initially ordered restitution of the premises to Ventures and denied Active Spine's request for a temporary injunction. A separate bench trial found Active Spine and the Muchowiczes liable for breach of contract. On appeal, the Nebraska Supreme Court affirmed the restitution order but reversed the breach of contract judgment, remanding for a jury trial.At the jury trial, Ventures presented evidence of unpaid rent and CAM charges, while Active Spine argued that Ventures failed to provide notice of budgeted direct expenses, a condition precedent to their obligation to pay CAM charges. The jury found in favor of Ventures, awarding $593,723.82 in damages. Active Spine and the Muchowiczes moved for a new trial or judgment notwithstanding the verdict (JNOV), arguing errors in the jury's damage calculations and the lack of notice of budgeted direct expenses.The Nebraska Supreme Court reviewed the case and found that the district court did not abuse its discretion in admitting the exhibits as business records and not summaries under Neb. Rev. Stat. § 27-1006. The court also held that Active Spine and the Muchowiczes failed to preserve their arguments for appeal regarding the costs of new tenancy, COVID-19 abatement, and the amended lease. The court affirmed the district court's denial of the motion for new trial or JNOV, concluding that the jury's verdict was supported by sufficient evidence. View "132 Ventures v. Active Spine Physical Therapy" on Justia Law

Westwood Motorcars, LLC leased commercial property in Dallas to operate an automobile dealership. The lease was set to expire in 2013, but an addendum allowed Westwood to extend the lease for two additional 24-month terms. In 2015, ownership of the property changed hands and Virtuolotry, LLC became the new landlord. Westwood sought to exercise its option to extend the lease for the second additional term, but Virtuolotry’s lawyers refused, asserting that Westwood had breached the lease in numerous ways. Amidst this dispute, Westwood claimed that Virtuolotry and its manager, Richard Boyd, harassed Westwood at the premises, interfering with its business operations. Westwood sued Virtuolotry in district court, seeking a declaratory judgment that it had not breached the lease and that it had properly extended the lease for another two years. Virtuolotry sued in justice court to evict Westwood for unpaid rent, lease violations, and holding over unlawfully.The justice court ruled in favor of Virtuolotry, awarding it "possession only." Westwood appealed the judgment to the county court at law. However, a few weeks before the trial date, Westwood formally withdrew its appeal in county court, and the county court entered a “stipulate[d] and agree[d]” judgment ordering “that possession of the Premises is awarded” to Virtuolotry. Westwood fully vacated the property, but continued its pending suit in district court, adding claims for breach of contract (against Virtuolotry) and constructive eviction (against Virtuolotry and Boyd). The district court ruled in favor of Westwood, awarding damages and attorney’s fees.Virtuolotry and Boyd appealed, and the court of appeals reversed the district court's decision, ruling that by agreeing to the eviction-suit judgment in county court, Westwood “voluntarily abandoned the premises” and thus “extinguish[ed] any claim for damages.” Westwood then petitioned the Supreme Court of Texas for review.The Supreme Court of Texas reversed the court of appeals' decision, ruling that the court of appeals erred by giving a judgment of possession from a court of limited jurisdiction preclusive effect over Westwood’s claim for damages in district court. The Supreme Court of Texas held that Westwood’s agreement to entry of the county-court judgment cannot reflect assent to anything more than what that judgment resolves—i.e., who receives immediate possession of the property. The court remanded the case to the court of appeals for further proceedings. View "WESTWOOD MOTORCARS, LLC v. VIRTUOLOTRY, LLC" on Justia Law

Weston Bennion was injured when his apartment deck collapsed and subsequently sued his landlord, Dale Stolrow, for negligence. The parties settled, with Bennion agreeing to release Stolrow and his insurer from all claims in exchange for $150,000. The settlement was subject to related subrogation claims and healthcare liens, and Bennion promised to indemnify Stolrow from liability for any such claims and liens. Before making the payment, Stolrow informed Bennion that he intended to distribute the payment in two checks: one payable to Bennion and the other payable to a collection agency that had a healthcare lien on the settlement funds. Bennion objected and filed a motion to enforce the parties’ agreement, arguing that its terms did not allow Stolrow to issue a portion of the settlement funds to a third party.The district court disagreed with Bennion and suggested that Stolrow issue two checks: one jointly to Bennion and the third party for the amount of the lien, and another to Bennion for the remainder of the funds. The court of appeals affirmed the district court’s decision. Bennion then petitioned for certiorari.The Supreme Court of the State of Utah granted certiorari to address whether the court of appeals erred in concluding that the parties’ agreement permitted Stolrow to issue a portion of the settlement funds jointly to Bennion and the third-party collection agency. The court agreed with Bennion, stating that the plain language of the release provides for payment to Bennion in exchange for his release of claims against Stolrow and his assumption of responsibility for third-party liens. Therefore, the court reversed the decision of the lower courts. View "Bennion v. Stolrow" on Justia Law

This case involves a dispute between Melissa Sanchez, a tenant, and Chris and Jennifer Pickering, her landlords, over the terms of a lease agreement for a mobile home owned by the Pickerings. Sanchez believed the agreement was a lease-to-own contract, while the Pickerings asserted it was a lease with a purchase option contract. After the Pickerings initiated an eviction action due to Sanchez's alleged violations of the agreement, Sanchez caused extensive damage to the home.The Pickerings sued Sanchez for waste, claiming she caused $40,000 in damages and sought treble damages. Sanchez counterclaimed, alleging violation of the Idaho Consumer Protection Act (ICPA), breach of contract, unjust enrichment, and retaliatory eviction. The district court found Sanchez liable for damages to the residence and awarded treble damages. It also determined that there was no deception on the Pickerings' part to sustain Sanchez's ICPA claim, the agreement was unenforceable due to a lack of mutual understanding, and that the Pickerings were unjustly enriched by the $10,000 down payment and offset the Pickerings' damages award by this amount. The remaining claims were dismissed.On appeal, the Supreme Court of Idaho affirmed the district court's decision. The court found substantial and competent evidence supporting the district court's decision that the Pickerings did not engage in a deceptive act under the ICPA. The court also rejected Sanchez's contention that the district court's damages award should have been reduced to reflect an insurance payment received by the Pickerings as Sanchez failed to provide an adequate record for review. Finally, the court upheld the district court's unjust enrichment award, finding that Sanchez had not demonstrated an abuse of discretion. The Pickerings were awarded attorney fees for having to respond to the collateral source issue. View "Pickering v. Sanchez" on Justia Law

In this case from the Supreme Court of North Dakota, Ryan Kratz, who had entered into a purchase agreement to buy a business and building from Donald and Carol McIlravy, failed to make the agreed-upon payments. The McIlravys initiated two eviction actions, and a separate action seeking damages, cancellation of the contract, and release of funds held in a trust account. The district court initially dismissed one of the eviction actions, but eventually ruled in favor of the McIlravys, awarding them damages and ordering release of the trust funds. Several years later, Kratz filed a motion under Rule 60(b), alleging the district court lacked subject matter jurisdiction over the eviction actions and seeking to vacate or void all findings, conclusions, and orders, except the dismissals of the eviction actions. The district court denied this motion and awarded attorney’s fees to the McIlravys.On appeal, the Supreme Court of North Dakota held that Kratz's appeal was limited to the judgment denying his Rule 60(b) motion and that the motion was timely. The court determined that the district court had jurisdiction over the eviction cases and that any violation of N.D.R.Ct. 7.1(b)(1) was harmless error. The court also held that the district court did not abuse its discretion in awarding attorney’s fees. Consequently, the court affirmed the decision of the lower court. View "Don's Garden Center v. The Garden District" on Justia Law

In this case, Epochal Enterprises, Inc., also known as Divine Orchids, entered into a commercial lease agreement with LF Encinitas Properties, LLC and Leichtag Foundation. The lease included a limitation of liability clause which stated that the defendants were not personally liable for any provisions of the lease or the premises, and the plaintiff waived all claims for consequential damages or loss of business profits. After the plaintiff sued the defendants, a jury found the defendants liable for premises liability and negligence.The jury awarded the plaintiff damages for lost profits and other past economic loss. However, the trial court granted the defendants’ motion for judgment notwithstanding the verdict (JNOV), reasoning that the lease agreement’s limitation of liability clause prevented the plaintiff from recovering the economic damages the jury awarded.The Court of Appeal, Fourth Appellate District Division One State of California, reversed the order granting JNOV in the defendants' favor, finding that the limitation of liability clause did not bar plaintiff’s recovery of damages. The court reasoned that the jury's award of damages necessarily implied a finding of gross negligence on the part of the defendants, which would be outside the scope of the indemnification clause. Further, the court held that the limitation of liability clause was void to the extent that it sought to shield the defendants from liability for their violations of the Health and Safety Code, as it violated public policy under Civil Code section 1668.On the defendants' cross-appeal regarding the damages award, the court affirmed the denial of the defendants' motion for partial JNOV, finding that substantial evidence supported the damages award. The court concluded that the jury could reasonably interpret the term "other past economic loss" on the verdict form as a different form of lost profits, and that the evidence presented to the jury provided a reasonable basis for calculating the amount of the plaintiff's lost profits. View "Epochal Enterprises, Inc. v. LF Encinitas Properties, LLC" on Justia Law

Seneathia K. Porter initiated an unlawful-detainer action against Tracy Murray, doing business as Tracy's Treasure Company, LLC ("Murray"), seeking possession of commercial property and the recovery of, among other things, unpaid rent, late fees, insurance costs, taxes, and attorney's fees. Porter claimed she owned the property, she had leased the property to Murray on a month-to-month basis for the sum of $1,500 per month, Murray defaulted under the lease by failing to pay rent in accordance with the lease, and that she had provided Murray with written notice that her right of possession of the property had been terminated. Murray, on the other hand, denied that she had leased the property. Rather, she claimed she had executed a contract to purchase the property and had made improvements to the property. Following a bench trial, the circuit court purported to enter a judgment in favor of Porter and against Murray. Murray appealed. The Alabama Supreme Court dismissed the appeal, finding no evidence that the district court had adjudicated the unlawful-detainer action. Thus, the circuit court lacked jurisdiction over the action and the judgment it entered was void and, therefore, would not support an appeal. View "Murray v. Porter" on Justia Law

Plaintiffs sued Defendant for breach of contract in connection with their rental of Defendant’s home. Defendant failed to file an answer, and the trial court entered a default judgment for $59,191. The judgment included $1,000 in attorneys’ fees pursuant to a provision in the parties’ lease agreement authorizing attorneys’ fees to the prevailing party not to exceed $1,000. Defendant appealed, and the Second Appellate District affirmed. While the appeal was pending, the trial court granted in part Plaintiffs’ motion under Code of Civil Procedure section 685.080, subdivision (a), for an order allowing their costs of enforcing the judgment. The trial court awarded $27,721 in attorneys’ fees under section 685.040, which allows as an award of costs attorneys’ fees incurred in enforcing a judgment “if the underlying judgment includes an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.” Section 1033.5, subdivision (a)(10)(A), in turn, provides that attorneys’ fees may be awarded as costs where authorized by contract. In this appeal, Defendant contends the trial court erred in awarding over $1,000 in attorneys’ fees for enforcing the judgment because the lease authorized attorneys’ fees “not to exceed $1,000.”   The Second Appellate District affirmed. The court explained that once the judgment was entered, the terms of the lease, including the $1,000 limitation on fees, were merged into and extinguished by the judgment. Because the judgment included an award of attorneys’ fees authorized by contract, section 685.040 allowed an award of reasonable attorneys’ fees incurred in enforcing the judgment. View "Nash v. Aprea" on Justia Law

Between 2015 and 2019, BitterSweet Ranch and its managers (“BitterSweet”) leased three parcels of farmland from Frank Sullivan and two of his business entities, The Green Desert, LLC, and The Sullivan Limited Partnership (collectively, “Sullivan”). The parties signed three identical five-year leases (“the Leases”) involving three separate parcels of real property, each owned by one of the three Sullivan parties. The Leases specified that Sullivan was to be responsible for payment of the property taxes, but that those parties were to be reimbursed by BitterSweet, and that BitterSweet was to be responsible for bi-annual rent payments, utilities, and water assessments. For a variety of reasons, the parties purportedly orally agreed to modify the Leases to offset amounts owed to each other throughout the terms of the Leases. Shortly before the Leases were set to expire at the end of their five-year terms, Sullivan claimed that BitterSweet was in breach of the Leases for its alleged failure to make timely rent payments, to pay all property taxes, and to pay the water assessments pursuant to the terms of the Leases. Sullivan then filed three lawsuits (one for each of the Leases and in the names of each of the three parties) in district court. The district court ordered the cases consolidated and then granted summary judgment in favor of BitterSweet, concluding that a genuine issue of material fact had not been created as to whether BitterSweet had breached the Leases. Sullivan appealed the adverse order. Finding no reversible error, the Idaho Supreme Court affirmed. View "Sullivan v. BitterSweet Ranch, LLC" on Justia Law