Gershenhorn v. Walter R. Stutz Enterprises

304 P.2d 395, 72 Nev. 293, 1956 Nev. LEXIS 117
CourtNevada Supreme Court
DecidedNovember 30, 1956
Docket3981
StatusPublished
Cited by7 cases

This text of 304 P.2d 395 (Gershenhorn v. Walter R. Stutz Enterprises) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gershenhorn v. Walter R. Stutz Enterprises, 304 P.2d 395, 72 Nev. 293, 1956 Nev. LEXIS 117 (Neb. 1956).

Opinions

[295]*295OPINION

By the Court, Badt, J.:

In this action, by a landlord for a declaration of the rights of the parties under a lease and option, for a cancellation of the lease, restitution of the premises and damages, the main questions presented on this appeal are as follows: (1) Is there substantial evidence to support the trial court’s findings that the building, which the lessors agreed to construct, was substantially completed and ready for occupancy in accordance with the agreement of the parties; that the lessees entered into occupancy thereof and that the lessees were in default in the performance of numerous covenants of the lease? (2) Was “substantial compliance” by the lessors sufficient to entitle them to relief or were certain covenants on their part to be performed such conditions precedent as to require an exact and complete performance? (3) [296]*296Was the option to purchase, contained in the lease, such an independent, separate and severable contract as to entitle the lessees to exercise such option despite their default in payment of rents and in the performance of other covenants of the lease? (4) Did the lessees effectively exercise their option to purchase in accordance with the terms of the lease? (5) Was there a fatal misjoinder of parties plaintiff? (6) Was there a fatal nonjoinder of parties defendant? (7) Was there a fatal variance between the pleadings and the proof? (8) Is there support in the record for the items of damage found by the court in the respective sums of $100,000 past-due rentals, $75,000 excess costs of the structure under the terms of the contract, and particularly $50,-000 damages reflecting the finding of fact that the lessors were compelled to defend at their own cost numerous lien foreclosure actions for labor and materials for which the lessees were responsible under the lease? Our disposition of some of these questions will eliminate the necessity for any extensive treatment of others. Some additional incidental points are also involved. In the following statement of facts we shall, for the most part, refer to the plaintiffs and respondents as the lessors and the defendants and appellants as the lessees.

Appellant Caplow, by assignment, replaced one O’Con-nor as one of the original lessees. On February 12, 1954, the lessors leased to the lessees certain real property in Clark County, Nevada, described by metes and bounds, for which the lessees agreed to pay $5,000 a month rent for five years “beginning when the premises and building being constructed by lessors for lessees is completed, ready and approved for occupancy.” The lessors represented that the zoning and other classification of the premises permitted the “erection, construction and operation of a building and appurtenances which shall be used for legal gambling and other incidental purposes in accordance with the laws of the State of Nevada.” The size of the building was agreed upon and its use described as for cocktail lounge, coffee shop, gambling [297]*297casino and incidental purposes, with road approaches, driveways, parking facilities and landscaping to the satisfaction of the lessees, as well as facilities for sewage disposal, water, electrical and other utilities and facilities. The lessors were not required to furnish the air conditioning, heating or ventilating units, trade fixtures or outdoor neon signs, but were to provide the necessary outlets and openings therefor. The lessors agreed not to permit mechanics’ liens to be filed against the premises and to pay promptly for all labor and materials. The lease provided further: “The lessors agree that all improvements, installations and repairs made by them shall be approved in respect to inflammability and safety to the public before the premises are open to the public by some person granted authority to do so by the County of Clark, State of Nevada, and if there is no such authorized person, then by a person or agency qualified to do so by reason of experience in fire protection.” The lease further provided that in default of payment of rent for 30 days or the breach of any other covenant for 60 days after notice, the lessors might cancel and terminate the lease and reenter. The lease provided further: “Lessees agree that if a valid execution or other process be levied upon the interest of the lessees or shall not be cured, removed or satisfied within 90 days * * *,” the lessors should have the right to cancel the lease and reenter. A successful action by the lessors against the lessees would entitle the lessors to a judgment for attorney fees as part of the costs. There was a corresponding reciprocal clause for the lessees.

Paragraph 28 of the lease reads in part as follows: “Lessees * * * are hereby given the option for three years from completion of the building to be erected * * * to purchase the entire premises * * * at the price and value of $417,000 * * * plus a sum equivalent to the cost of the improvements to be erected * * * ascertained by the production of the records of the lessors * * *. Such option may be exercised by the lessees as aforesaid, by written notice to the [298]*298lessors or their assigns, at any time within such 3-year period.”

On May 19, 1954, an amendment to the lease was executed in which the size of the building to be constructed was increased, the date of completion extended to July 15, 1954, and the cost fixed at not more than $123,200, plus excess costs of construction not to exceed $12 per square foot. To the $5,000 monthly rental was added an additional sum of 20 percent of the net profits of the business conducted on the premises, subject to certain reductions and conditions. This provision apparently never came into effect. It was further provided that if the business to be conducted should not commence within 6 months from completion of the building, the lease might be terminated at the option of the lessors, in which event, however, they were to reimburse the lessees for the latter’s costs of furniture, fixtures, equipment, supplies etc. The amendment provided further that if the lease were assigned to a limited partnership in which the lessors should hold a 20 percent interest, a three-year option was given to such limited partnership to purchase the premises for $750,000. This provision never became effective. The lessees agreed to lend the lessors $60,000 to assist in the construction of the premises, to be evidenced by noninterest bearing notes payable on or before five years. Of this sum $47,500 was advanced and the notes were given.

A second written amendment was executed June 12, 1954, which permitted the lessees to erect at their own costs a theater and restaurant building to be attached to the casino building. This would involve no further rentals and would add no additional amount to the option price.

Date for completion of construction and delivery of possession was extended to September 10, 1954. On or about that date a notice of completion of construction was filed and the lessors served the lessees with a written notice thereof, and with notice of the additional construction costs subject to the limitations of the contract, [299]*299computed according to figures submitted to be the sum of $65,163.32, payment of which sum was demanded.

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Gershenhorn v. Walter R. Stutz Enterprises
304 P.2d 395 (Nevada Supreme Court, 1956)

Cite This Page — Counsel Stack

Bluebook (online)
304 P.2d 395, 72 Nev. 293, 1956 Nev. LEXIS 117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gershenhorn-v-walter-r-stutz-enterprises-nev-1956.