The Leasing Hotline

SUMMARY JUDGMENT

A defendant is not entitled to summary judgment where a lease is ambiguous regarding whether only one defendant had exclusive control over the premises. Hurley v. 111 South Main Street, LLC., CV020346178S, Superior Court of Connecticut, Judicial District of Danbury, at Danbury, September 17, 2003.

Steven Bertrand was an employee of Fair Auto and suffered serious injury to his head after he slipped and fell in Fair Auto's parking lot. Katherine Hurley, as conservatrix of Bertrand, brought an action in negligence against Fair Auto and the owner/lessor of the leased premises, 111 South Main Street, LLC. She alleged that the defendants failed to remove ice to make the premises safe and further failed to warn of the icy conditions. 111 South Main moved for summary judgment, arguing it owed no duty to Bertrand because the lease between 111 South Main and Fair Auto granted possession and control of the premises to Fair Auto. The trial court denied the motion. It held that the lease between 111 South Main and Fair Auto left a material question of fact at issue that precluded summary judgment. The court considered that the lease did not accurately describe which portions of the premises were under the exclusive control of Fair Auto. It considered that the description of the property in the lease was left blank. Although Fair Auto attempted to cure this error through affidavits, the court held that such evidence was insufficient to pass summary judgment.

MANAGING AGENT

A managing agent has no apparent authority to release a tenant from its lease obligation, even if the agent offered to help the tenant find a sublessor, where it clearly notified the tenant during negotiations that it could not bind the owner/landlord. P.E.V. v. Kurtti and Martinez, No. 50452-5-I, Court of Appeals of Washington, Division One, September 22, 2003.

Kurtti and Martinez executed a 3-year lease with plaintiff-landlord P.E.V. Management. A third party, Emerald City Investment and Management, by leasing agent Gordon Boone, was the real estate leasing agent for the property. Prior to executing the final lease, Boone sent a draft lease to Kurtti and Martinez. A cover letter attached to the draft lease warned Kurtti and Martinez that although P.E.V. usually “went along” with Emerald City and Boone, Boone could not commit P.E.V. to all of the provisions of the draft lease. When the final lease was sent to each party for signature, Emerald City and Boone notified each party that it was not making any representation or recommendation to either party and that each party was responsible for consulting its own attorney or tax advisor regarding the provisions of the lease. Thereafter, Kurtti and Martinez approached Boone regarding their desire to vacate the premises and that they found a potential subtenant for the leased space. Boone indicated he would handle the entire negotiation of the sublease for Kurtti and Martinez, but made no indication regarding the final termination of Kurtti and Martinez's original lease. However, rather than negotiate a sublease for Kurtti and Martinez, Boone offered the potential subtenant a new lease, which the potential subtenant rejected. Nevertheless, Kurtti and Martinez vacated the premises prior to the expiration of the lease term and without a sublessor or a new tenant for the premises. P.E.V. sued Kurtti and Martinez for breach of the lease and for the balance of rent due; Kurtti and Martinez brought in Boone and Emerald City as third-party defendants.

They claimed that they vacated the premises based upon Boone's representations that he would “handle” the subtenant for the premises and on Boone's apparent authority as an agent for P.E.V. to release them from the lease. Both P.E.V. and Boone/ Emerald City were granted summary judgment against Kurtti and Martinez, and the appellate court affirmed. The appellate court held that Boone could not be considered an actual or apparent agent of P.E.V. Kurtti and Martinez were aware prior to the inception of the lease that Boone had no authority to bind P.E.V., only to negotiate on its behalf. The record gave no indication that Boone had any authority to create or terminate a lease on behalf of P.E.V.

RES JUDICATA

Res judicata does not apply where the terms of the parties' lease permit the landlord to seek future unpaid rent if it were unable to relet the premises, even if it had recovered some of the rent in a prior dispossessory proceeding. International Biochemical Industries, Inc., v. Jamestown Management Corporation et al., A03A1275, Ga. Ct. App., 3rd Div., August 15, 2003.

Jamestown Management Corporation (Jamestown), and International Biochemical Industries, Inc., f/k/a Bioshield Technologies, Inc. (Bioshield), entered into a 10-year lease commencing July 9, 1999. The lease provided several remedies in case of a default, including an option to terminate the lease and an accelerated future rent clause. By December 2000, Bioshield had vacated the premises, relocated and refused to pay any rent after December 2000. Jamestown commenced a dispossessory proceeding against Bioshield that resulted in a default judgment against Bioshield on Jan. 21, 2001 for 2-months past due rent. However, Jamestown did not terminate the parties' lease. Jamestown then attempted, over a 12-month period, to relet the property, but was unable to do so. In December 2001, Jamestown sued Bioshield for rent, late fees, interest, attorney fees and damages. Bioshield counterclaimed, arguing that Jamestown's claims were barred by the doctrine of res judicata. It argued that Jamestown's failure to bring the claim for future rent or accelerated rent in the dispossessory action precluded it from doing so later. The trial court granted summary judgment against Bioshield. It held that the lease between the parties had never been terminated, and that the lease permitted Jamestown to seek future rent that had not yet accrued. The appellate court affirmed. It held that the doctrine of res judicata did not apply. It considered that under the terms of the lease, Jamestown was authorized to repossess the premises without terminating the lease. Jamestown was also authorized under the lease to reserve the right to recover future rent if it was unable to relet the premises, even if it had recovered some of the rent in a prior dispossessory proceeding.

UNLAWFUL DETAINER STATUTE

A landlord must provide sufficient notice and an opportunity to cure in a notice of default to a tenant. Paschall v. Voicestream PCS III Corp., No. 50978-1-1, Wash. Ct. App., Div. One, September 22, 2003.

In September, 2000, Paschall and Voicestream entered into a long-term lease agreement for rooftop space for Voicestream's cellular telephone communications system on top of Paschall's building. Installation of the equipment occurred in 2001. After the installation, leaks developed in the roof, causing damage to the property of the building's occupants. Paschall sent a letter to Voicestream and its in-house counsel on February 1, 2002, regarding the problems with the roof. Another letter was sent on March 6, 2002. Paschall later argued that these two letters provided sufficient notice of default to Voicestream under the Washington unlawful detainer statute. Although neither letter contained the word “waste,” Paschall argued the letters were adequate notification to vacate for waste under the unlawful detainer statute. Paschall then moved to require Voicestream to show cause why an unlawful detainer trial date should not be set. On the return date at the hearing, the trial judge determined that the court did not have jurisdiction under Washington's unlawful detainer statute because Voicestream never received legally sufficient notice from Paschall and the complaint was dismissed without prejudice. Paschall appealed the determination of the trial court rather than filing a new notice under the statute. The appellate court affirmed, holding that the letters of February 1 and March 6, 2002, contained insufficient notice under the unlawful detainer statute. It considered that the letters did not contain the notice of default language or a demand to correct the default or surrender the premises. Furthermore, the letters never claimed that Voicestream was committing waste under the statute.

SUMMARY JUDGMENT

A defendant is not entitled to summary judgment where a lease is ambiguous regarding whether only one defendant had exclusive control over the premises. Hurley v. 111 South Main Street, LLC., CV020346178S, Superior Court of Connecticut, Judicial District of Danbury, at Danbury, September 17, 2003.

Steven Bertrand was an employee of Fair Auto and suffered serious injury to his head after he slipped and fell in Fair Auto's parking lot. Katherine Hurley, as conservatrix of Bertrand, brought an action in negligence against Fair Auto and the owner/lessor of the leased premises, 111 South Main Street, LLC. She alleged that the defendants failed to remove ice to make the premises safe and further failed to warn of the icy conditions. 111 South Main moved for summary judgment, arguing it owed no duty to Bertrand because the lease between 111 South Main and Fair Auto granted possession and control of the premises to Fair Auto. The trial court denied the motion. It held that the lease between 111 South Main and Fair Auto left a material question of fact at issue that precluded summary judgment. The court considered that the lease did not accurately describe which portions of the premises were under the exclusive control of Fair Auto. It considered that the description of the property in the lease was left blank. Although Fair Auto attempted to cure this error through affidavits, the court held that such evidence was insufficient to pass summary judgment.

MANAGING AGENT

A managing agent has no apparent authority to release a tenant from its lease obligation, even if the agent offered to help the tenant find a sublessor, where it clearly notified the tenant during negotiations that it could not bind the owner/landlord. P.E.V. v. Kurtti and Martinez, No. 50452-5-I, Court of Appeals of Washington, Division One, September 22, 2003.

Kurtti and Martinez executed a 3-year lease with plaintiff-landlord P.E.V. Management. A third party, Emerald City Investment and Management, by leasing agent Gordon Boone, was the real estate leasing agent for the property. Prior to executing the final lease, Boone sent a draft lease to Kurtti and Martinez. A cover letter attached to the draft lease warned Kurtti and Martinez that although P.E.V. usually “went along” with Emerald City and Boone, Boone could not commit P.E.V. to all of the provisions of the draft lease. When the final lease was sent to each party for signature, Emerald City and Boone notified each party that it was not making any representation or recommendation to either party and that each party was responsible for consulting its own attorney or tax advisor regarding the provisions of the lease. Thereafter, Kurtti and Martinez approached Boone regarding their desire to vacate the premises and that they found a potential subtenant for the leased space. Boone indicated he would handle the entire negotiation of the sublease for Kurtti and Martinez, but made no indication regarding the final termination of Kurtti and Martinez's original lease. However, rather than negotiate a sublease for Kurtti and Martinez, Boone offered the potential subtenant a new lease, which the potential subtenant rejected. Nevertheless, Kurtti and Martinez vacated the premises prior to the expiration of the lease term and without a sublessor or a new tenant for the premises. P.E.V. sued Kurtti and Martinez for breach of the lease and for the balance of rent due; Kurtti and Martinez brought in Boone and Emerald City as third-party defendants.

They claimed that they vacated the premises based upon Boone's representations that he would “handle” the subtenant for the premises and on Boone's apparent authority as an agent for P.E.V. to release them from the lease. Both P.E.V. and Boone/ Emerald City were granted summary judgment against Kurtti and Martinez, and the appellate court affirmed. The appellate court held that Boone could not be considered an actual or apparent agent of P.E.V. Kurtti and Martinez were aware prior to the inception of the lease that Boone had no authority to bind P.E.V., only to negotiate on its behalf. The record gave no indication that Boone had any authority to create or terminate a lease on behalf of P.E.V.

RES JUDICATA

Res judicata does not apply where the terms of the parties' lease permit the landlord to seek future unpaid rent if it were unable to relet the premises, even if it had recovered some of the rent in a prior dispossessory proceeding. International Biochemical Industries, Inc., v. Jamestown Management Corporation et al., A03A1275, Ga. Ct. App., 3rd Div., August 15, 2003.

Jamestown Management Corporation (Jamestown), and International Biochemical Industries, Inc., f/k/a Bioshield Technologies, Inc. (Bioshield), entered into a 10-year lease commencing July 9, 1999. The lease provided several remedies in case of a default, including an option to terminate the lease and an accelerated future rent clause. By December 2000, Bioshield had vacated the premises, relocated and refused to pay any rent after December 2000. Jamestown commenced a dispossessory proceeding against Bioshield that resulted in a default judgment against Bioshield on Jan. 21, 2001 for 2-months past due rent. However, Jamestown did not terminate the parties' lease. Jamestown then attempted, over a 12-month period, to relet the property, but was unable to do so. In December 2001, Jamestown sued Bioshield for rent, late fees, interest, attorney fees and damages. Bioshield counterclaimed, arguing that Jamestown's claims were barred by the doctrine of res judicata. It argued that Jamestown's failure to bring the claim for future rent or accelerated rent in the dispossessory action precluded it from doing so later. The trial court granted summary judgment against Bioshield. It held that the lease between the parties had never been terminated, and that the lease permitted Jamestown to seek future rent that had not yet accrued. The appellate court affirmed. It held that the doctrine of res judicata did not apply. It considered that under the terms of the lease, Jamestown was authorized to repossess the premises without terminating the lease. Jamestown was also authorized under the lease to reserve the right to recover future rent if it was unable to relet the premises, even if it had recovered some of the rent in a prior dispossessory proceeding.