International Industries, Inc. v. United Mortgage Co.

606 P.2d 163, 96 Nev. 150, 1980 Nev. LEXIS 540
CourtNevada Supreme Court
DecidedFebruary 6, 1980
DocketNo. 9653
StatusPublished
Cited by24 cases

This text of 606 P.2d 163 (International Industries, Inc. v. United Mortgage Co.) 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
International Industries, Inc. v. United Mortgage Co., 606 P.2d 163, 96 Nev. 150, 1980 Nev. LEXIS 540 (Neb. 1980).

Opinion

[152]*152OPINION

By the Court,

Batjer, J.:

Appellant, International Industries, Inc., appeals from a judgment declaring its lease with respondent, United Mortgage, terminated as of May 8, 1975, and awarding to United attorney’s fees in the amount of $750. We affirm the declaratory judgment but reverse the award of attorney’s fees.

International argues that it cured all defaults before United could effectively terminate the lease and that the district judge erred in reaching the opposite conclusion. Furthermore, International challenges the award of attorney’s fees.

On February 18, 1972, United leased to International real property located in Las Vegas. The lease was for a period of 20 years with an annual rent of $41,377.20, payable in equal monthly installments on the first day of each calendar month. Pursuant to the lease, International was to pay, before delinquency, all taxes and assessments. Paragraph 12 of the lease set forth the procedure to be followed if International defaulted in payment of the rent or taxes, stating that

If Tenant defaults in any of the covenants or agreements on its part to be performed hereunder, and if Tenant fails to cure such default within thirty (30) days, after receipt of written notice from Landlord, or after the expiration of a reasonable time from receipt of such notice if such default could not be cured within thirty (30) days by Tenant’s diligent efforts, then Landlord may at its option, at any time thereafter during the continuance of such default, declare this lease terminated, reenter and take possession of the Premises pursuant to applicable provisions of law.

International subleased the premises to Frank H. Slaven, who made timely rent payments to it until International’s lease was terminated. International, however, was late in making 11 of its rent payments in 1974 and 1975. On each of the eleven occasions, United’s treasurer sent delinquency notices and requested that International pay on time in the future.

On March 26, 1975, United received a notice of delinquent taxes for 1973-1974. At that point, United’s attorney became [153]*153involved. He sent a Notice of Default to International on April 2, 1975, advising it that the March 1, 1975, rent, the April 1, 1975, rent, and the real property taxes plus interest thereon were unpaid. The notice stated that

This default is declared pursuant to Paragraph #12 of the Lease, and unless the defaults are cured within thirty (30) days from receipt of this Notice, I have been authorized to declare the lease terminated, and to take whatever steps are necessary to recover the premises.

By the time the 30-day grace period expired on May 7, 1975, United had received and cashed a check for the rent due March 1. On May 8, 1975, United sent a letter to Frank Slaven, the sublessee, instructing him to pay all future rent to United or to vacate, because the lease with International had been terminated on that date.

International’s April rent check was also sent on May 8, 1975, but did not reach United until May 13, 1975. United returned the check to International along with a letter stating that the lease had been terminated effective May 8, 1975. International received the termination letter and check on May 16, 1975.

International had paid the taxes due, except for the interest charge, by the end of March, 1975. The Assistant County Treasurer called International and was told that the remaining amount was forthcoming. Approximately two weeks later, he called again and was told the same thing. After another two weeks passed without payment, International’s previous checks were returned because they were insufficient to cover the amount due. Some time after May 8, 1975, and before May 15, 1975, International’s check of final tax payment was received, dated May 8, 1975. The Assistant County Treasurer held the final check until the checks he had sent back were returned to him. On May 15, 1975, tax redemption receipts were written.

The trial court found that the defaults were not timely cured and that United had effectively terminated the lease on May 8, 1975.

For the first time on appeal, International asserts that Paragraph 13 of the lease permits the withholding of rent in the event of a transfer of title without written notice to International.1 United Mortgage Co. transferred title to the lease to [154]*154United Mortgage Trust soon after the lease was executed. Consequently, according to International, it could withhold rent without suffering a default.

We need not consider this issue because it was not raised at the trial. Central Bank v. Baldwin, 94 Nev. 581, 583 P.2d 1087 (1978), Penrose v. O’Hara, 92 Nev. 685, 557 P.2d 276 (1976). Nevertheless, the argument is without merit. International was not aware of the transfer at the time of the default. It cannot now claim that it relied upon the assignment as an excuse for its late payment of rent and taxes. See Wecht v. Anderson, 84 Nev. 500, 444 P.2d 501 (1968).

International’s primary contention is that all defaults were cured before the lease was effectively terminated. International argues that the termination was not effective until it received notice of the termination on May 16, 1975. Because it had tendered all amounts due by May 15, 1975, International asserts that the lease was not terminated during the continuance of the default as required by Paragraph 12 of the lease.

We turn first to the issue of the validity of United’s termination of the lease on May 8, 1975. By its terms, the lease requires only that the lessor give the lessee written notice, of default and thirty days to cure such default. There is no requirement of a written notice of termination.2 However, International argues that some affirmative act by United, after the grace period, was required to terminate the lease.

When a forteiture is not automatic upon failure to cure a default, but the lessor may elect to terminate the lease, then it is necessary that the lessor make a declaration of forfeiture or formal reentry, or do some unequivocal act that signifies an election to terminate. Padilla v. Sais, 414 P.2d 223 (N.M. 1966); Maretz v. Apuzzo, 378 A.2d 1082 (Conn.App. 1977).

In this case, United warned International that it would [155]*155declare the lease terminated if the defaults were not cured by May 7, 1975.3 We agree with the trial court that United’s letter to the sublessee Slaven on May 8, 1975, was sufficient to effectuate a termination of the lease because it declared the lease terminated and implicitly gave notice of United’s intent to reenter if Slaven decided to vacate rather than enter into a lease arrangement with United. Furthermore, as soon as United received the April rent check on May 13, 1975, it returned the check to International with actual notice of the termination.

We reject International’s complaint that United’s notice to Slaven was an improper interference with the contractual relationship between Slaven and International.

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Cite This Page — Counsel Stack

Bluebook (online)
606 P.2d 163, 96 Nev. 150, 1980 Nev. LEXIS 540, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-industries-inc-v-united-mortgage-co-nev-1980.