Justia Contracts Opinion Summaries

Articles Posted in Landlord - Tenant
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The Court of Appeals affirmed the order of the Appellate Division affirming the judgment of Supreme Court dismissing this declaratory judgment action brought by commercial tenants who unambiguously agreed to waive the right to commence a declaratory judgment action as to the terms of their leases, holding that, under the circumstances of this case, the waiver clause was enforceable, requiring dismissal of the complaint.Plaintiffs executed two commercial leases with the predecessor-in-interest of Defendant. Each lease incorporated a rider provided that the tenant waived its right to bring a declaratory judgment action with respect to any provision of the lease. After Defendant sent notices to Plaintiffs alleging various defaults Plaintiffs commenced this action seeking a declaratory judgment that they were not in default. Supreme Court granted Defendant's motion for summary judgment and dismissed the action. The Appellate Division affirmed, determining that the declaratory judgment waiver was enforceable and barred Plaintiffs' action. The Court of Appeals affirmed, holding that the declaratory judgment waiver was enforceable, and therefore, the action was properly dismissed. View "159 MP Corp. v Redbridge Bedford, LLC" on Justia Law

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The Supreme Court held that, under David v. Inwood North Professional Group-Phase I, 747 S.W.2d 373 (Tex. 1988), a tenant can terminate a commercial lease contract for the landlord's prior material breach and that the evidence offered to prove attorney's fees in this case was insufficient for fee-shifting awards.After terminating its lease early and vacating the premises while still owing unpaid rent a commercial tenant (Tenant) sued Landlord for breach of contract and breach of the implied warranty of suitability and also sought a declaratory judgment. The jury found that Landlord materially breached the lease agreement first, Landlord breached the implied warranty of suitability, and Tenant had the right to terminate the lease agreement. The trial court awarded Tenant attorney's fees. The court of appeals affirmed. After explaining the prevailing party's evidentiary burden and the standard for shifting reasonable and necessary attorney's fees to the non-prevailing party, the Supreme Court reversed the court of appeals' judgment as to the attorney's fee award but otherwise affirmed, holding (1) a commercial tenant can terminate a commercial lease based on the landlord's prior material breach; but (2) the evidence used to prove attorney's fees was not legally sufficient to support the fee award. View "Rohrmoos Venture v. UTSW DVA Healthcare, LLP" on Justia Law

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The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court concerning premises liability. Shannon Adamson, an employee of the Alaska Marine Highway System (AMHS), fell approximately 15 feet when the passenger ramp at the Port of Bellingham's (Port) Bellingham Cruise Terminal (BCT) collapsed. The accident caused severe, life-changing injuries. The State of Alaska leased the BCT from the Port, allowing ferries to dock at the BCT and load and unload passengers and their vehicles. The Port elected to not implement an interlock device; when Adamson was operating the passenger ramp, slack was created in some attached cables. When she removed the locking pins, the ramp collapsed, snapped the cables, and Adamson and the ramp fell approximately 15 feet until the ramp caught on the ferry. Adamson and her husband sued the Port in federal court, alleging negligence and seeking damages for medical expenses, loss of wages, pain and suffering and loss of consortium. The federal court determined Adamson was the Port's business invitee; the jury returned a verdict in favor of Adamson and awarded over $16 million in damages. The court found the Port under three separate theories of liability: duty to a business invitee, duty as a landlord, and a promise to perform repairs under the lease contract. The issue presented to the Washington Supreme Court centered on whether a property owner-landlord was liable for injuries that occur on its property when the lessee has exclusive possession at the time of the accident but only priority use under the lease and the landlord has contracted to maintain and repair the premises. The Supreme Court answered the first certified question in the affirmative and consequently, did not address the second question. View "Adamson v. Port of Bellingham" on Justia Law

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The Eighth Circuit affirmed an adverse order by the FAA's Office of Dispute Resolution for Acquisition (ODRA) regarding property Southern leased to the Administration. Southern subsequently sold the property and surrounding land to Prairie Land, assigning its lease with the FAA to Prairie Land. After the FAA refused to vacate the premises, Prairie Land initiated a contract dispute with the ODRA.The court held that the FAA's continued occupancy of the property was permitted, and the ODRA did not err by concluding that the holdover provisions permitted the FAA to holdover on the property until either a new lease was agreed upon or it acquired the property in fee. Therefore, the FAA was fully within its rights to continue possessing the property. View "Prairie Land Holdings, LLC v. FAA" on Justia Law

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This case arose out of disputes between the parties involving a twelve year commercial lease of office space in Baltimore, Maryland. The Fourth Circuit held that the district court misconstrued the lease agreement and misapplied Maryland law in concluding that Montgomery Park had a duty to endeavor to relet the premises and minimize its damages as a condition precedent to recovering against NCO. The panel held that the lease agreement's language incorporated the common law mitigation-of-damages doctrine, which holds that a plaintiff cannot recover damages which it could have reasonably avoided. Therefore, Montgomery Park's recovery should only have been reduced by the amount of rent that NCO could demonstrate would have been recovered by reasonable efforts to re-let the space.The court also held that the district court, in evaluating the commercial reasonableness of Montgomery Park's mitigation efforts, applied the wrong standard. The court held that reasonable commercial efforts to mitigate damages did not require Montgomery Park to favor NCO’s space over other vacant space in the building, but rather, commercial reasonableness only required Montgomery Park to reasonably market NCO's space on an equal footing with the other spaces that it was seeking to rent. Accordingly, the court vacated the district court's judgment and remanded for further proceedings. View "NCO Financial Systems, Inc. v. Montgomery Park, LLC" on Justia Law

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The Court of Appeals affirmed the judgment of the Court of Special Appeals affirming the judgment of the circuit court granting summary judgment in favor of Respondent in this action brought by Petitioners seeking to collect real estate brokerage commissions allegedly due after the tenant of the property exercised its option to renew a lease that Petitioners had procured for a prior owner, holding that the lower courts’ judgments were correct.Specifically, the Court of Appeals held (1) even if Petitioners qualified as third-party beneficiaries, that only gave them the right to sue whomever was liable; (2) because Respondent was not a party to the lease its assignors also were not parties; and (3) in the assignment of the lease the assignors had expressly rejected any obligations of the lease, and therefore, Respondent was not liable. View "Cushman & Wakefield of Maryland, Inc. v. DRV Greentec, LLC" on Justia Law

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The U.S. Department of Housing and Urban Development (HUD) administers the project-based Section 8 housing program using Housing Assistance Payments renewal contracts. The landlords own publicly-assisted housing in Yonkers and allege that the government breached the renewal contracts, resulting in money damages. The trial court determined that it had jurisdiction, found the government liable for breach of contract, and awarded $7.9 million in total damages. The Federal Circuit vacated, finding that the trial court lacked jurisdiction because the parties were not in privity of contract. The contracts at issue were executed in a two-tiered system. First, HUD contracted with a public housing agency (New York State Housing Trust Fund Corporation), which contracted with the Landlords. Neither contract explicitly named both the government and the Landlords as directly contracting parties. View "Park Properties Associates v. United States" on Justia Law

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The Supreme Judicial Court affirmed the decision of the superior court affirming the judgment of the district court in favor of Appellee, Appellant’s landlord, holding that Appellant’s violation of his lease in three ways that were independent from his possession of marijuana justified Appellee’s termination of the lease.Appellee issued Appellant a notice that it was terminating the parties’ lease, stating that Appellant’s use and possession of marijuana, as well as some of Appellant’s other activities, violated the terms of the parties’ lease. Appellee then filed an forcible entry and detainer complaint, and the district court entered judgment granting possession of the apartment to Appellant. Appellant appealed, arguing that because he had a certificate to use marijuana for medical purposes, Appellee and the district court were required to reasonably accommodate his possession and use of marijuana. The Supreme Judicial Court affirmed, holding that Appellant’s violations of his lease that were independent from his possession of marijuana, standing alone, justified Appellee’s termination of the lease. View "Sherwood Associates LP v. Jackson" on Justia Law

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Tenant filed suit against landlord and others after landlord rejected tenant's offer to purchase the building tenant rented for his audio recording business. Landlord ultimately sold the building to a third party because the offer was for considerably more money.The Court of Appeal affirmed the dismissal of the action and held that a right of first refusal is not an essential term that carries forward into a holdover tenancy unless the parties so indicate. In this case, there was no such indication and tenant's alternative theories for enforcing the right to first refusal lacked merit. View "Smyth v. Berman" on Justia Law

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The Supreme Court affirmed the decision of the circuit court denying Appellants’ motion to intervene in a partnership dissolution action, holding that Appellants failed to meet the tripartite test necessary for intervention as a matter of right under S.D. Codified Laws 15-6-24(a)(2).Appellants entered into a farm lease/cash rent agreement with Berbos Farms General Partnership. Appellants sued Berbos Farms to recover unpaid cash rent under the lease for the years 2015. During discovery, Appellants learned that Joe and Lisa Berbos, partners in Berbos Farms, had filed a separate action to dissolve Berbos Farms. Seeking to preserve their right to payment of the 2015 cash rent in the event Berbos Farms was dissolved, Appellants move to intervene in the partnership dissolution action. The circuit court denied the motion. The Supreme Court affirmed, holding that because Appellants failed to show that the claim for unpaid cash rent might be impaired by the disposition of the partnership dissolution lawsuit, the circuit court correctly denied the motion to intervene under section 15-6-24(a)(2). View "Berbos v. Berbos" on Justia Law