Consolidated AG of Curry, Inc. v. Rangen, Inc.

912 P.2d 115, 128 Idaho 228, 1996 Ida. LEXIS 23
CourtIdaho Supreme Court
DecidedMarch 4, 1996
Docket21640
StatusPublished
Cited by6 cases

This text of 912 P.2d 115 (Consolidated AG of Curry, Inc. v. Rangen, Inc.) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Consolidated AG of Curry, Inc. v. Rangen, Inc., 912 P.2d 115, 128 Idaho 228, 1996 Ida. LEXIS 23 (Idaho 1996).

Opinion

JOHNSON, Justice.

This is a commercial lease case. We conclude that because there was no abandonment by the lessee, the lessor had no obligation to mitigate damages. We also conclude that the trial court properly allowed amendment of the complaint to add a party defendant after trial but that the trial court should not have dismissed as premature a claim for waste.

I.

THE BACKGROUND AND PRIOR PROCEEDINGS

Consolidated Ag of Curry (Consolidated) leased a storage facility to Rangen, Inc. (Rangen) for a term of five years, 1989 to 1994. Rangen paid the monthly rent of $3,000 until January 1992. Rangen entered an agreement with Intermountain Farmers Association, Inc. (IFA) through which IFA bought Rangen’s fertilizer division, and Ran-gen assigned its lease (the lease) with Consolidated to IFA. Consolidated was not informed about the assignment and was not asked to consent to it. IFA paid rent from February through May 1992. IFA then told Consolidated that it refused to pay rent because of certain environmental and security concerns.

In April 1993, Consolidated filed suit against Rangen for the rent due under the lease. Rangen brought a third-party action against IFA requesting that IFA pay all damages awarded to Consolidated. At trial, neither Rangen nor IFA argued that IFA’s behavior was not a breach. Instead, each argued that Consolidated had failed to mitigate damages. In its memorandum decision after trial, the trial court stated that Consolidated had no duty to mitigate damages because “IFA never abandoned, vacated, or surrendered the premises.” In its findings of fact and conclusions of law, the trial court stated that the lease “was never terminated, either by agreement of the parties, express or implied, or by operation of law.” The trial court concluded that Consolidated “did not fail to mitigate its damages.”

At the end of the trial, based on Rangen’s motion and IFA’s lack of objection, the trial court dismissed IFA as a third-party defendant. Consolidated immediately moved to amend its complaint to make IFA a defendant in its suit against Rangen. The trial court granted this motion.

During the trial, the trial court allowed Consolidated to introduce evidence of waste caused by Rangen. After trial, the trial court ruled that this issue was premature because the lease was still in effect, and IFA was still in possession.

The trial court awarded Consolidated judgment against Rangen and IFA, jointly and severally, for $75,000 in delinquent lease payments, prejudgment interest, plus costs and attorney fees.

Rangen and IFA appealed.

II.

CONSOLIDATED DID NOT HAVE A DUTY TO MITIGATE DAMAGES.

Rangen and IFA assert that the trial court should have ruled that Consolidated had a duty to mitigate damages and did not do so. We disagree.

Abandonment is one means of terminating a lease. Abandonment is an intent to “ ‘leave, quit, renounce, resign, surrender, relinquish, vacate, ... [or] discard,_ Abandon denotes the absolute giving up of an *230 object, often with the further implication of its surrender to the mercy of something or someone else.’ ” Carrington v. Crandall, 65 Idaho 525, 532, 147 P.2d 1009, 1012 (1944) (quoting Webster’s New International Dictionary (1941)). This Court has stated that when a tenant repudiates a lease and abandons the premises, the landlord “may take possession of the premises, [and] relet them.... [D]amages will be the difference between the amount secured on the reletting and the amount provided for in the original lease.” De Winer v. Nelson, 54 Idaho 560, 567-68, 33 P.2d 356, 359 (1934) (emphasis added).

In Industrial Leasing Corp. v. Thomason, the Court dealt with the duty to mitigate damages where the lessee of personal property decides not to continue leasing equipment and returns it to the dealer who had arranged the lease. 96 Idaho 574, 532 P.2d 916 (1974). In Industrial, the lessor did not retake possession of the equipment or lease it to another lessee. Id. at 576, 532 P.2d at 918. This Court concluded that the “best rule” was to require mitigation because it

would discourage idleness of productive property and would be in keeping with the other generally accepted damages rules in other commercial law transactions. E.g., in the rental of real property, most jurisdictions place a duty upon a landlord to seek new tenants when the lessees have refused to pay rent as provided for in the lease agreement and have vacated the property. Martin v. Siegley, 123 Wash. 683, 212 P. 1057 (1923); Wright v. Baumann, 239 Or. 410, 398 P.2d 119 (1965).

Id. at 577, 532 P.2d at 919. In both of the cases cited by the Court in Industrial to support this statement, abandonment was the basis for the duty to mitigate. See, Martin, 212 P. at 1058; Wright, 398 P.2d at 121.

We conclude that it is consistent with the jurisprudence of this state as reflected in Industrial to require a lessor of real property to mitigate damages if the lessee has refused to pay rent and has abandoned the property.

We construe the combined effect of the trial court’s memorandum decision after trial and its findings of fact and conclusions of law to constitute a finding that Rangen and IFA did not abandon the leased premises. There is substantial and competent evidence to support this finding, and it is not clearly erroneous. I.R.C.P. 52(a). The trial court correctly concluded that because there was no abandonment, Consolidated had no duty to mitigate damages.

III.

THE TRIAL COURT INCORRECTLY DISMISSED THE WASTE CLAIM.

Rangen and IFA assert that the trial court should not have dismissed Consolidated’s waste claim as premature. We agree.

“ ‘[W]aste is the permanent or lasting injury to the estate by one who has not an absolute or unqualified title thereto.’ ” Dahlquist v. Mattson, 40 Idaho 378, 389, 233 P. 883, 886 (1925) (quoting Price v. Ward, 25 Nev. 203, 58 P. 849 (1899)). I.C. § 6-201 (1990) authorizes an action for waste. In Olson v. Bedke, 97 Idaho 825, 831, 555 P.2d 156, 162 (1976), the Court ruled that a lessee may be sued for an injunction and for damages pursuant to I.C. § 6-201 based on waste occurring during a lease.

In its complaint, Consolidated claimed that personal property was missing from the leased premises and that it had other expenses to be proven at trial. Consolidated was trying to recover for the waste that had occurred up to the time of trial. These claims were not premature because the facts giving rise to them had already occurred. Cf. Bell Rapids Mut. Irrigation Co. v. Hausner,

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Bluebook (online)
912 P.2d 115, 128 Idaho 228, 1996 Ida. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/consolidated-ag-of-curry-inc-v-rangen-inc-idaho-1996.