Case Notes

Due to these behaviors, Pickett claimed that her clients stayed away in droves and her business suffered. Because the landlord failed to intervene with the co-tenants and/or the receptionist on Pickett's behalf, she sued the landlord, seeking damages for breach of contract, breach of the covenant of quiet enjoyment, breach of the implied covenant of good faith and fair dealing, and attorney fees.

At the trial level, the landlord moved for summary judgment and was granted it on just one of Pickett's claims — breach of the covenant of quiet enjoyment. Pickett appealed.

A tenant proves a breach-of-the-covenant-of-quiet-enjoyment claim in Nevada by proving constructive eviction. Winchell v. Schiff, 124 Nev. 938, 947, 193 P.3d 946, 952 (2008). There are four elements of proof of constructive eviction for commercial tenants. These are, according to Mason-McDuffie Real Estate, Inc. v. Villa Fiore Dev., LLC, 335 P.3d 211, 214 (2014): 1) that the landlord has acted or failed to act; 2) in a manner that rendered the whole or a substantial part of the premises unfit for occupancy for the purpose for which it was leased; 3) that the tenant therefore vacated the premises within a reasonable time; and 4) that the tenant gave the landlord notice of the defect(s) and a reasonable opportunity to cure the defect(s).

The trial court granted the landlord's motion for summary judgment on the breach-of-quiet-enjoyment claim on the ground that the plaintiff — if suffering due to a breach of the covenant of quiet enjoyment — lost the right to complain of it by not vacating the premises soon enough (element 3).

On appeal, the court agreed with the plaintiff that the question of whether the premises were vacated in a timely manner was one for the jury. Therefore, the grant of summary judgment in favor of the landlord on the claim of breach of the covenant of quiet enjoyment was reversed. The plaintiff's other claims were also allowed to go forward, so that at trial, the court on remand must decide whether the landlord breached the lease contract, the covenant of quiet enjoyment and the implied covenant of good faith and fair dealing, as well as whether the plaintiff is entitled to attorney fees.

Judge Tao concurred in the decision, but tempered his assent with a very large dose of skepticism as to the plaintiff's entire set of claims. “I join in the order of partial reversal,” wrote Justice Tao, “but, on remand, would recommend the district court address a question that all parties have apparently overlooked and that might moot all of the other grounds raised in this appeal: Are Pickett's causes of action even cognizable? In reviewing the record, I have my doubts.” Those doubts centered around the nature of Pickett's complaints, all of which boiled down to one contention: that landlords have a legal duty to police the relationships of tenants to one another, even when no tenant's behavior rises to the level of an actionable tort.

Where did this supposed duty spring from? A Nevada commercial landlord's statutory obligations are spelled out in Nevada Revised Statutes (NRS) Chapter 118C, and nothing in this chapter describes a landlord's duty to referee disputes between tenants. Nor is there any such common law duty in Nevada's case law, and Judge Tao opined that, unless the courts wanted to step into the the realm of judicial activism, there is no way Pickett can prevail on her claims as a matter of law.

Judge Tao found problems of proof — of causation, damages, etc. — in all of Pickett's claims and urged the trial court on remand to consider his many concerns. Among them was that, in Nevada, a claim for a breach of the implied covenant of quiet enjoyment requires that the landlord's actions cause the entirety of the premises, or a substantial part thereof, to be rendered “unfit for occupancy.” The issues Picket complained of did not give rise to this level of injury.

Significantly, Judge Tao also observed that the issues Pickett complained of seemed to emanate not from the landlord but from the co-tenants, so that her complaints should probably have been brought against those co-tenants as claims for tortious interference with contract or with business advantage. However, to prove those claims under Nevada law, the co-tenants' actions could only be proven tortious by a showing of unlawful or improper means of interference (see Crockett v. Sahara Realty Corp., 95 Nev, 197, 200, 591 P.2d 1135, 1137 (1979)), along with proof that the co-tenants acted with the specific intent to damage Pickett's contract, rather than out of mere “malevolent spite.” See Las Vegas-Tonopah-Reno Stage Lines v. Gray Line Tours, 106 Nev. 283 (1990). Thus, those claims, too, did not appear viable, in Tao's opinion.

— Janice G. Inman