Centerline Investment Co. v. Tri-Cor Industries, Inc.

80 S.W.3d 499, 2002 Mo. App. LEXIS 1579, 2002 WL 1611063
CourtMissouri Court of Appeals
DecidedJuly 23, 2002
DocketNo. ED 79545
StatusPublished
Cited by1 cases

This text of 80 S.W.3d 499 (Centerline Investment Co. v. Tri-Cor Industries, Inc.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Centerline Investment Co. v. Tri-Cor Industries, Inc., 80 S.W.3d 499, 2002 Mo. App. LEXIS 1579, 2002 WL 1611063 (Mo. Ct. App. 2002).

Opinion

JAMES R. DOWD, P.J.

Tri-Cor Industries, Inc. (tenant) breached its commercial lease with respondent Centerline Investment Company (landlord). The landlord, in an effort to mitigate, moved another tenant in the building into Tri-Cor’s space, charging a higher rent than Tri-Cor was paying and then sued Tri-Cor for the rent due on the other tenant’s prior lease and for other consequential damages. The trial court held that Centerline could recover for the rent due on the other tenant’s space and that Tri-Cor was not entitled to a credit for the additional rent paid on its former space by the new tenant. Tri-Cor appeals. Cen-terline cross-appeals. We reverse and remand.

Robert Bernstein, doing business as Centerline, leased suites 100, 102 and 104, occupying 6,240 square feet, to Tri-Cor for three years, from November 1, 1998 to October 31, 2001. According to the lease, Tri-Cor’s fixed base rent was $4,865 per month, but Tri-Cor was also responsible for paying a pro-rata share of any increase in real estate taxes and common area maintenance (CAM) expenses such as water, sewer, landscaping, snow removal and parking lot repairs. Tri-Cor also paid a security deposit of $6,740.

On June 29, 1999, less than nine months into its first year under the lease, Tri-Cor notified Bernstein by letter that it was closing its Maryland Heights office and sought to either terminate the lease or sublease the space to another tenant. Bernstein agreed to allow Tri-Cor to sublease the property. On July 23, 1999, TriCor entered into a six-month exclusive agency agreement with Bernstein’s real estate brokerage firm, Robern Inc., to find a replacement tenant.

Tri-Cor vacated the premises on August 31, 1999, but continued to pay its monthly rent. In October 1999, Tri-Cor notified Robern that it was terminating the exclusive agency agreement and then hired NAI Finn & Associates as its agent. NAI Finn also proved unsuccessful in reletting the space. On April 1, 2000, Tri-Cor stopped making its monthly rent payments.

Bernstein filed suit for breach of the lease on May 16, 2000. In his petition, Bernstein prayed for the base rent on the leased space, additional rent as a result of tax increases, CAM charges, late payment charges, expenses associated with reletting the space, collection costs (including attorneys’ fees and court costs), and interest on all unpaid balances.

In June 2000, one of his existing tenants, Alcide Corporation, approached Bernstein about the vacant space left behind by TriCor. Alcide was at that time beginning a three-year lease of Suite 138, occupying 2,080 square feet in the same building, for $1,690.00 per month. Alcide and Bernstein terminated the lease for Suite 138 and entered into a new three-year lease on the former Tri-Cor space, running from July 1, 2000 through June 30, 2003. Al-cide’s lease called for escalating base rent payments: $5,070 per month the first year, $5, 325 per month the second year, and $5,595 per month the third year.

[502]*502A bench trial was held on March 20 and 21, 2001. At trial, Centerline argued that in addition to the unpaid rent on the leased premises, it was also entitled to rent on the space that Alcide vacated when it moved into Tri-Cor’s space. Tri-Cor disagreed, arguing that it owed Centerline nothing because it was induced to leave the space by false assurances from Bernstein that he had located a new tenant for the space. The trial court disbelieved TriCor’s claim that it was induced to leave and held that Tri-Cor breached the lease when it stopped making payments in April 2000. The court awarded Centerline the following: unpaid rent (including late payment charges) on its leased space ($16,-054.50); additional rent (including late payment charges and 4% interest) as a result of tax increases ($1,059.24) and CAM charges ($3,888.09);1 expenses associated with reletting the space ($1,703.30); landlord overhead ($567.19); utilities ($110.54); and attorneys’ fees ($8,739.27). The court further found that moving Al-cide from its space to Tri-Cor’s former space was a reasonable mitigation of damages and that under the terms of the lease Tri-Cor was responsible for the rent (and late charges) on the space Alcide vacated when it moved into Tri-Cor’s space ($16,-731). After crediting Tri-Cor for its security deposit of $6,740, the court’s awarded Centerline $41,053.89.2 The trial court refused, however, to award Centerline damages for lost leasing commission, concluding that they were not specifically pleaded as special damages.

Tri-Cor appeals, arguing that the court erred in three respects. First, Tri-Cor argues the court erred in awarding Cen-terline damages based on the rent for Al-cide’s former- space. Second, Tri-Cor argues that it should have been given credit for the rent Alcide paid over the amount Tri-Cor was obligated to pay. Finally, Tri-Cor argues that Centerline should not have been awarded 100% of its attorneys’ fees because much of the work the attorneys did was on aspects of the case Cen-terline should lose on appeal. Centerline cross-appeals, arguing that it was entitled to real estate commissions on the Tri-Cor lease and the reletting of the Tri-Cor premises after default.

In reviewing a bench tried case, we view the evidence in the light most favorable to the judgment and disregard all other evidence. P.L.W. v. T.R.W, 890 S.W.2d 688, 690 (Mo.App. S.D.1994). We must affirm a trial court’s judgment unless it is not supported by evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carrón, 536 S.W.2d 30, 32 (Mo. banc 1976).

Tri-Cor’s first point is that the trial court erred in finding Tri-Cor liable for rent on the space Alcide left vacant when it moved into Tri-Cor’s space. Tri-Cor argues that holding it liable for rent on a space it did not contract for is, as a matter of law, beyond the contemplation of the parties and unforeseeable. Centerline argues that Tri-Cor was obligated to pay these rents under Articles 12 and 13 of the lease, which state that Tri-Cor would reimburse Centerline for all “direct or consequential” damages if it should default. Centerline maintains that because the lease required Tri-Cor to pay “consequential” and “any and all” damages from a breach, its recovery is not limited to dam[503]*503ages that are the “natural and direct consequence of the breach.”

This is a case of first impression in Missouri. We agree with Centerline that including a provision for “consequential” and “any and all” damages in a lease broadens the scope of damages beyond those that are the “natural and direct consequence” of the breach, but even consequential damages are limited. If consequential damage clauses were interpreted to allow recovery for “any and all” damages, however remote, they would include damages entirely unimagined and unforeseeable by the parties and “stretch infinitely in time.” Dobbs, Law of Remedies 228 (2nd ed., Hornbook Series, 1993). The law has therefore limited consequential damages to those that are “within the contemplation of the parties at the time of contracting, or ‘foreseeable’ to them.” Id. at 770; Mark v. H.D. Williams Cooperage Co., 204 Mo. 242, 103 S.W. 20, 25 (1907).

Centerline cites no ease where a court has allowed an award of damages for the rent on another tenant’s space when that tenant moves into the space formerly occupied by the defendant. The only two reported cases on this issue are from Hawaii and Washington.

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Bluebook (online)
80 S.W.3d 499, 2002 Mo. App. LEXIS 1579, 2002 WL 1611063, Counsel Stack Legal Research, https://law.counselstack.com/opinion/centerline-investment-co-v-tri-cor-industries-inc-moctapp-2002.