Crown Coco, Inc. v. Red Fox Restaurant of Royalton, Inc.

409 N.W.2d 919, 73 A.L.R. 4th 225, 1987 Minn. App. LEXIS 4650
CourtCourt of Appeals of Minnesota
DecidedAugust 11, 1987
DocketC8-87-27
StatusPublished
Cited by3 cases

This text of 409 N.W.2d 919 (Crown Coco, Inc. v. Red Fox Restaurant of Royalton, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crown Coco, Inc. v. Red Fox Restaurant of Royalton, Inc., 409 N.W.2d 919, 73 A.L.R. 4th 225, 1987 Minn. App. LEXIS 4650 (Mich. Ct. App. 1987).

Opinions

OPINION

LANSING, Judge.

Crown CoCo, Inc., sued to collect unpaid rent and taxes owed by appellants under the terms of a ten-year real estate lease. Appellants, who had paid rent through the fifth year, maintained that the lease was unenforceable because it did not sufficiently describe the premises. The trial court awarded unpaid rent due from March 1, 1984, through August 1, 1986, and unpaid taxes from 1983 through the first half of 1986. Appellants’ motion for amended findings or a new trial1 was denied, and they appeal. We affirm.

FACTS

Crown CoCo, Inc., operates a chain of gas station/convenience stores under the business name “E-Z Stop.” One of the stores is located in Royalton, Minnesota, on U.S. Highway 10. Crown CoCo owns most of the block on which the E-Z Stop station is located, including a one-story building at the opposite end of the block, formerly operated as a grocery store.

In May 1978 Crown CoCo entered into an agreement with Red Fox Restaurant of Royalton, Inc. (Red Fox), along with Harley Miller, individually, to remodel -the vacant grocery store, converting it into a restaurant. Red Fox and Miller proposed to rent the remodeled building and whatever portion of the adjacent parking lot necessary to operate the restaurant. The parties executed a lease, dated May 26, 1978, with Red Fox as lessee and Miller, individually, as lessee and guarantor. The lease ran for a period of ten years with possession beginning on March 1, 1979. Monthly rental was set at $1,000 for the first five years and $1,500 for the last five years, plus an escalator of 7 percent of gross monthly receipts. The lease also provided for payment of real estate taxes, and appellants paid taxes under the lease from 1979 to 1982.

The remodeling agreement required Crown CoCo to install an adequate furnace and air conditioning system. Miller arranged for the installation of the system for a cost of $6,900, but Crown CoCo refused to reimburse him.

Red Fox began operating its restaurant in the leased premises in March 1979. Three years later, in April 1982, Red Fox and Miller assigned their lease interests to appellants Schmaltz and Russell, who individually assumed the tenants’ obligations under the lease. Red Fox and Miller remained liable under the assignment.

The assignees closed the restaurant in November of 1982, but continued to pay rent through February 1, 1984. Beginning in March 1984, when the rent under the lease increased from $1,000 to $1,500 per month, appellants refused to make further payments. The parties stipulated at trial that the total unpaid rent was $45,000 and that appellants had not contributed to the payment of real estate taxes due in the years 1983 through the first half of 1986.

The trial court awarded Crown CoCo $45,000 in unpaid rent due from March 1, 1984, through August 1, 1986, and $9,521 for taxes payable in 1983 through the first half of 1986. The court permitted appellants an offset of $6,900 on their counterclaim for the air system installed in the building.

ISSUES

1. Is the description of the demised premises sufficiently definite to be enforceable?

2. Did the trial court properly compute the amount of taxes due under the lease?

ANALYSIS

The trial court found that the lease between Crown CoCo and Red Fox covered [921]*921the restaurant structure and the land beneath it and was sufficiently definite to bind the parties to the lease. Appellants claim that there is no evidence to support this finding.

To prevail, appellants must show that the trial court’s findings of fact and conclusions of law are “manifestly contrary to the evidence” and “clearly erroneous.” Preferred Risk Mutual Insurance Co. v. Anderson, 277 Minn. 342, 344, 152 N.W.2d 476, 479 (1967); Minn.R.Civ.P. 52.01. In evaluating the record, the evidence must be viewed in the light most favorable to the prevailing party. Theisen’s, Inc. v. Red Owl Stores, Inc., 309 Minn. 60, 66, 243 N.W.2d 145, 149 (1976).

I

Appellants argue that the lease is unenforceable because of a defect in the legal description. The lease describes the premises as follows:

That portion of Lots 5 through 18 in Block 2 of P.A. Greene’s Addition to the Town (now City) of Royalton, Minnesota (Parcel formerly occupied by Pearson’s Grocery Store, more particularly described on drawing attached hereto).

No drawing was attached to the lease or later furnished. Although it was not determined that a drawing had never existed, none was produced at trial. The issue is, therefore, whether the lease is enforceable without the drawing.

It is axiomatic that a lease must provide a reasonably certain means of identifying the demised properly. A description of land is sufficient if it “provides, when applied to the physical features of the surrounding terrain, a reasonably certain guide or means for identifying such land * * Greer v. Kooiker, 312 Minn. 499, 506, 253 N.W.2d 133, 139 (1977) (quoting Miracle Construction Co. v. Miller, 251 Minn. 320, 323, 87 N.W.2d 665, 669 (1958)).

Parol evidence may be considered to complete the identification of the leased property. Greer, 312 Minn. at 505, 253 N.W.2d at 138-139; Gustafson v. Juckem, 164 Minn. 516, 205 N.W. 446 (1925) (parol evidence permitted to show extent of leasehold identified only by name of apartment building and street number); see also Paynesville Land Co. v. Grabow, 160 Minn. 414, 423, 200 N.W. 481, 485 (1924).

The lease describes the property as “[t]hat 'portion of Lots 5 through 18 in Block 2 of P.A. Green’s Addition * * * (Parcel formerly occupied by Pearson’s Grocery Store * * *)” (emphasis added). Therefore, the lease itself suggests that the leased property included only the property on which the building is located and the building itself. Minnesota case law early established that “[l]and may be granted or leased by the description of a building on it.” Lanpher v. Glenn, 37 Minn. 4, 5, 33 N.W. 10, 11 (1887). Case law also establishes that the lease of a building is a lease of the land on which it stands. Target Stores, Inc. v. Twin Plaza Co., 277 Minn. 481, 494, 153 N.W.2d 832, 841 (1967) (citing Lanpher v. Glenn).

Additional evidence supports the trial court’s conclusion. The grocery store/restaurant was a readily identifiable part of Lots 5 through 18. The lease was executed only after the parties had completed an inspection of the site and the vacant grocery store. The remodeling agreement was executed with reference to that building, and appellants insured the premises and included the disputed legal description in their own agreement for the sale of the Red Fox chain.

Although appellants did not raise the issue of parking space in their pleadings, they maintained at trial that the failure to describe the parking space contributed to the indefiniteness of the lease.

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Related

Merrill v. DeMott
951 P.2d 1040 (Nevada Supreme Court, 1997)
Crown Coco, Inc. v. Red Fox Restaurant of Royalton, Inc.
409 N.W.2d 919 (Court of Appeals of Minnesota, 1987)

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Bluebook (online)
409 N.W.2d 919, 73 A.L.R. 4th 225, 1987 Minn. App. LEXIS 4650, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crown-coco-inc-v-red-fox-restaurant-of-royalton-inc-minnctapp-1987.