Manhattan Buildings, Inc. v. Hurley

643 P.2d 87, 231 Kan. 20, 1982 Kan. LEXIS 246
CourtSupreme Court of Kansas
DecidedMarch 17, 1982
Docket53,555
StatusPublished
Cited by38 cases

This text of 643 P.2d 87 (Manhattan Buildings, Inc. v. Hurley) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Manhattan Buildings, Inc. v. Hurley, 643 P.2d 87, 231 Kan. 20, 1982 Kan. LEXIS 246 (kan 1982).

Opinions

The opinion of the court was delivered by

Miller, J.:

This is an original action in mandamus, brought by the petitioner, Manhattan Buildings, Inc., the owner of the Woman’s Club building in downtown Topeka, against the respondent, Patrick J. Hurley, Secretary of Administration of the State of Kansas. Manhattan leased the building to the Secretary; before taking possession under the lease, the Secretary gave Manhattan a notice of termination. By this action, Manhattan asks this court to declare that the termination clause of the lease was not properly invoked, and that Section 69 of 1981 Senate Bill No. 470 (later 1981 Session Laws of Kansas, Chapter 32, Section 69, [22]*22and now K.S.A. 1981 Supp. 75-3921) is unconstitutional and void. Manhattan also seeks an order in the nature of mandamus, compelling the Secretary to perform all of his obligations under the lease. The attorney general and the Legislative Coordinating Council were granted leave to intervene.

The essential facts, which are not in substantial dispute, are as follows: Throughout the year 1980, various employees of the department of administration and the insurance department carried on negotiations with representatives from Manhattan Buildings with regard to leasing the Woman’s Club building for the insurance department, which was to move from its quarters in the State Office Building to the Woman’s Club building. These negotiations culminated in a written lease dated January 8, 1981, executed by Manhattan Buildings as lessor and the Secretary of Administration as lessee, and approved by the sublessee, Fletcher Bell, Commissioner of Insurance. The lease required the lessor to renovate the building according to stated and appended specifications, and to complete this work before the State took possession. The lease covered a period of ten years, commencing May 1, 1981. It provided for payment of rent in the total sum of $1,899,687.50, payable $17,969.78 on May 1, 1981, $94,984.38 to be paid semiannually on each July 1 and January 1 thereafter through July 1,1990, and a final payment of $77,014.50 to be paid January 1, 1991. Clause No. 9 of the lease gives rise to this litigation. It reads as follows:

“Termination for Fiscal Necessity: Notwithstanding any other provision of this lease, if funds anticipated for the continued fulfillment of this lease agreement are at any time not forthcoming, either through the failure of the legislature to appropriate funds or the discontinuance or material alteration of the program under which funds were provided, then second party [the Secretary] shall have the right to terminate this lease by giving first party a reasonable notice specifying the reasons for such necessary termination.”

It is undisputed that neither the insurance department nor the department of administration had available funds appropriated for the purpose of funding this specific lease during the fiscal year ending on the 30th day of June, 1981. Funding for the lease was to come from appropriations to be made by the 1981 legislature.

The insurance department, at the time the lease was entered into, was occupying space in the State Office Building. A request for funds to cover the rental for that space was included within the department’s original budget request for the fiscal year be[23]*23ginning on July 1, 1981. That request was not sufficient to cover the increased cost of leasing the Woman’s Club building, and accordingly, early in 1981, that request was increased. The Governor, in his recommendations to the legislature, included the increased amount. Appropriations for the insurance department, incorporating that increase, were then included within 1981 Senate Bill No. 158. The bill was referred to the Senate Ways and Means Committee, where a subcommittee recommended that the increase be stricken from the insurance department’s appropriation. The subcommittee’s report explains its recommendation as follows:

“The Subcommittee concurs with the Governor’s recommendations except for two items. The recommended $385,598 for rents exceeds the requested amount by $156,805 and reflects the anticipated relocation of the agency from the State Office Building to a privately-owned facility at 9th Street and Topeka Blvd. The Subcommittee questions whether it is in the best interests of the state to be contracting with a private landlord when the same funding could be dedicated toward amortizing the cost of a state-owned building. Furthermore, the Subcommittee is of the opinion that the Legislature should not appropriate additional funds for new leases prior to review of the comprehensive space management plan proposed by the Department of Administration.”

The full Senate Ways and Means Committee, in considering the subcommittee report, discussed the possibility of planning a second state office building instead of leasing more space in privately owned buildings. It adopted the subcommittee report, and recommended the bill for passage. The Senate then passed the bill, with the additional funds deleted.

Next in the legislative process, a subcommittee of the House Ways and Means Committee recommended that the additional funds be restored to the insurance department’s appropriation. The full committee, however, did not adopt the subcommittee report, and recommended the bill for passage without the additional funds requested by the insurance department. 1981 Senate Bill No. 158 was then passed by the House, approved by the Governor, and published, without an appropriation of funds for the insurance department to cover the Woman’s Club lease.

That, however, is not the end of the legislative history. On April 30, 1981, upon the recommendation of the Governor, the House Ways and Means Committee adopted a motion to make a contingency appropriation of $550,000 to the department of administration for the cost of rent, moving expenses, and modification [24]*24costs of providing space for state agencies. Immediately thereafter, however, a substitute motion was adopted, which removed $150,000 from the contingency appropriation and placed it in the insurance department’s budget. This was made a part of the omnibus appropriation bill, 1981 Senate Bill No. 470, and that bill, with the increased amount included within the insurance department’s appropriation, was passed by the House on May 1, 1981. The bill was then referred to a conference committee, which prepared a report removing the $150,000 from the insurance department’s appropriation, restoring a like amount to the contingency appropriation of the department of administration, and adding Section 69, which forbids the expenditure of moneys appropriated to any state agency for the lease of the Woman’s Club property. The bill, amended as recommended by the conference committee, was adopted by both houses of the legislature on May 4, 1981. In that form it was approved by the Governor, was published, and is included within the 1981 Session Laws.

Section 5(a) of 1981 Senate Bill No. 470, now Section 5(a) of Chapter 32 of the 1981 Session Laws of Kansas, reads as follows:

“Sec. 5.
“DEPARTMENT OF ADMINISTRATION
“There is appropriated for the above agency from the state general fund for the fiscal year specified, the following:
Fiscal Year 1981
Fiscal Year 1982

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Bluebook (online)
643 P.2d 87, 231 Kan. 20, 1982 Kan. LEXIS 246, Counsel Stack Legal Research, https://law.counselstack.com/opinion/manhattan-buildings-inc-v-hurley-kan-1982.