Harmsen v. Dr. MacDonald's, Inc.

403 N.W.2d 48, 1987 Iowa App. LEXIS 1541
CourtCourt of Appeals of Iowa
DecidedJanuary 28, 1987
Docket86-118
StatusPublished
Cited by5 cases

This text of 403 N.W.2d 48 (Harmsen v. Dr. MacDonald's, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harmsen v. Dr. MacDonald's, Inc., 403 N.W.2d 48, 1987 Iowa App. LEXIS 1541 (iowactapp 1987).

Opinion

DONIELSON, Presiding Judge.

Plaintiff landlord appeals and defendant tenant cross-appeals from the judgment in an action for breach of a lease agreement. The plaintiff asserts that under the terms of the lease agreement defendant failed to establish a right to recover upon its counterclaim that plaintiff had breached the lease agreement. The defendant asserts that the evidence was insufficient to support a finding that plaintiff exercised reasonable diligence in an attempt to mitigate damages. We affirm.

On January 21, 1981, the plaintiff entered into an agreement of lease with the defendant. The lease was for a term of five years, commencing February 1, 1981. The lease stated that the leased property was to be used as a feed mill and grain drying facility. The defendant did not start operating the leased premises until March or April 1981.

Article XI of the lease agreement provides that the landlord (plaintiff) is to deliver possession of the leased premises with the improvements free from material defects and in operating condition. In order for the defendant to properly use the facilities, the distribution head had to be in proper working order and it had to be waterproof. Though plaintiff directed that several repairs be made to the distributor head prior to the defendant’s occupancy, there was a large opening in the rim of the distribution head which allowed rain water to come in, resulting in grain spoilage. In order to prevent this spoilage, the defendant had a new distributor head installed at a cost of $11,263.53.

The defendant vacated the leased premises in the spring of 1983, but continued to pay rent until November 1, 1983. The plaintiff, however, was not informed of defendant’s intent to abandon the lease until December of 1983, at which time the defendant informed the plaintiff that the distributor head had been replaced. The defendant told the plaintiff it would do whatever reasonable to help in finding a new tenant. The defendant placed advertisements in the local newspaper and in Feed-stuff's, an agricultural journal. The plaintiff also advertised the premises in August of 1984 and put up several “for rent” signs on the premises. Though plaintiff was not successful in leasing the entire property, *50 some storage Lins were leased for the sum of $2,000.00.

Plaintiff filed the present action in June 1984 to recover unpaid rent owing under the lease. The defendant contended that plaintiff had failed to mitigate his damages. The defendant also counterclaimed, alleging that the plaintiff had breached the lease agreement by failing to deliver the premises free from material defect. The trial court held that the plaintiff was entitled to the unpaid rent and that the plaintiff had shown due diligence in mitigating his damages. The trial court also ruled in favor of the defendant on its counterclaim for breach of contract.

Our scope of review is limited to the correction of errors at law. Iowa R.App.P. 4. We are bound by the trial court’s findings of fact if supported by substantial evidence. Iowa R.App.P. 14(f)(1). We are not, however, bound by the trial court’s determinations of law.

We first address plaintiff’s argument on appeal that the trial court erred in holding that the defendant was entitled to recover upon its counterclaim alleging that plaintiff had breached the terms of the lease. The plaintiff contends that the defendant is barred from recovery because it did not inform him of the defect in the distributor head until December of 1983. The plaintiff contends that the defendant had a reasonable duty within a reasonable time after the discovery of the defect to inform the plaintiff of the defect, citing for support Iowa Code section 554.2607 (1985). However, Article 2 of the Iowa Uniform Commercial Code, sections 554.2101, et seq., does not apply to lease agreements. The sections were intended to apply to transactions in goods, Iowa Code section 554.2102 (1985), and are intended to govern transactions between buyers and sellers. Iowa Code §§ 554.2103(l)(a), (d) (1985). Therefore, the statutory notice restrictions imposed by the Uniform Commercial Code are not applicable to the present case.

The plaintiff also contends that the trial court erred in applying the accepted rules of contract construction to the parties’ lease agreement because the terms of the agreement were clear and unambiguous. When interpreting the contractual terms chosen by the parties, our object is to ascertain the meaning and intention of the parties as expressed by the language used. Pathology Consultants v. Gratton, 343 N.W.2d 428, 434 (Iowa 1984). “The court will not resort to rules of construction where the intent of the parties is clear and unambiguous language.” Allen v. Highway Equipment Co., 239 N.W.2d 135, 139 (Iowa 1976). Where, however, language is of doubtful meaning or if difficult conclusions may be drawn from the evidence, the court will resort to rules of construction. Rector v. Alcorn, 241 N.W.2d 196, 202 (Iowa 1976) (citing Brammer v. Allied Mutual Insurance Co., 182 N.W.2d 169, 172 (Iowa 1970)). In the construction of written contracts, the cardinal principle is that the intent of the parties must control, and except in cases of ambiguity, this is determined by what the contract itself says. Iowa R.App.P. 14(f)(14).

Article XI of the lease agreement provides in pertinent part:

Landlord shall be required to deliver possession of the demised premises to Tenant with all improvements and personal property thereon free from material defects and in operating condition capable of milling grain, with such property including, but not limited to, the scale, leg (for grain distribution), bulk bins, overhead storage bins, augers, electrical motors, farm tractor (including loader and mower), and two and one-half ton GMC delivery truck. In addition, Landlord will replace an overhead door at the South end of the scalehouse. Landlord will also retain and pay James Wisor to supervise, repair and start up, and to instruct tenant’s employees in the operation of the demised premises during Tenant’s first two weeks of occupancy thereof. Thereafter the cost of repair for such improvements and personal property shall be borne by Tenant.

The plaintiff contends that the terms of the lease are clear and unambiguous. Accord *51 ing to the plaintiff, he was required to pay James Wisor to supervise, repair, start up, and instruct the defendant’s employees in the operation of the premises for the first two weeks of occupancy. Thereafter, the cost of repair or improvements were to be borne by the defendant. We disagree.

Iowa courts have soundly rejected any theory that, absent an agreement, the landlord warrants that leased property will be suitable for the purpose for which it is rented. Knapp v. Simmons, 345 N.W.2d 118

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403 N.W.2d 48, 1987 Iowa App. LEXIS 1541, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harmsen-v-dr-macdonalds-inc-iowactapp-1987.