MRI Northwest Rental Investments, I, Inc. v. Schnucks-Twenty-Five, Inc.

763 S.W.2d 375, 1989 Mo. App. LEXIS 20, 1989 WL 712
CourtMissouri Court of Appeals
DecidedJanuary 10, 1989
DocketNo. 54239
StatusPublished
Cited by1 cases

This text of 763 S.W.2d 375 (MRI Northwest Rental Investments, I, Inc. v. Schnucks-Twenty-Five, Inc.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MRI Northwest Rental Investments, I, Inc. v. Schnucks-Twenty-Five, Inc., 763 S.W.2d 375, 1989 Mo. App. LEXIS 20, 1989 WL 712 (Mo. Ct. App. 1989).

Opinion

STEPHAN, Judge.

MRI Northwest Rental Investments, I, Inc. (“MRI”), the sole general partner of Northwest Plaza Associates, Ltd., the owner of Northwest Plaza, a shopping center in St. Louis County, entered into a commercial lease with Allied Supermarkets, Inc. (“Allied”) which Allied later assigned to Schnucks-Twenty-Five, Inc. (“Schnucks”). MRI sued both Allied and Schnucks in a two count petition seeking declaratory relief and damages for breach of contract. MRI appeals from the judgment of the trial court entered in favor of respondents Allied and Schnucks. Allied and Schnucks have cross-appealed on the issue of attorneys’ fees. In the interest of judicial economy, the two appeals have been consolidated. We reverse and remand in part and affirm in part the judgment of the trial court.

The lawsuit filed by MRI against respondents involved the interpretation of a special termination provision of a commercial lease for premises located at Northwest Plaza Shopping Center in St. Louis County where Schnucks maintained a grocery supermarket. The lease was originally entered into between Allied and MRI’s predecessor in interest in 1965. Allied assigned its lease to Schnucks in 1970. The lease was amended in 1978.

The lease as amended in 1978 provided in part:

Section 6.02. Operation of Business.
Except as provided in Section 27.03 hereof, Tenant shall continuously operate all of the leased premises during the entire term of this lease with due diligence and efficiency so as to produce all of the gross sales which may be produced by such manner of operation, unless prevented from doing so by causes beyond Tenant’s control....

Section 27.03 of the lease, captioned “Use of Premises” and also amended in 1978, is the sole provision of the lease allowing early termination before February 28, 1990. In pertinent part, Section 27.03 states as follows:

Tenant shall continuously conduct and operate a grocery supermarket upon the leased premises, together with such other of the aforesaid types of business as tenant shall, at its option, desire to operate, except for temporary interruptions due to fire or other casualty, strikes or any other causes beyond Tenant’s control.
... Tenant shall have the right to cease operation of its business on the Demised Premises and terminate this lease upon Tenant giving Owner one (1) year prior written notice of its intent to cease operation of its business and terminate this lease.

In 1983 MRI became owner of Northwest Plaza Shopping Center and landlord under the lease. In 1984 Schnucks exercised its option to renew the lease for five years effective March 1, 1985, and continuing to February 28, 1990, subject to its right to terminate. On March 12, 1985, Schnucks wrote a letter to MRI stating: “... this letter will serve as notice of our intent to cease operations and to terminate the aforesaid Lease. Accordingly, the lease shall terminate as of March 15, 1986.” On March 24, 1985, however, Schnucks ceased it business operations on the premises. It closed its store and vacated the premises. MRI, both before and after Schnucks ceased its operations, informed Schnucks [377]*377that MRI considered Schnucks’ attempted notice to terminate the lease ineffective. MRI claimed the notice given was defective because Schnucks ceased its business operations just eleven days after giving notice, instead of the one year period required under section 27.03 of the lease.

After giving notice, Schnucks continued to pay rent for the one year period until March 15, 1986. MRI accepted the rent payments. In the interval between Schnucks’ giving one year’s notice and trial on November 30, 1986, MRI had not procured a tenant to replace Schnucks.

The only issue raised by MRI in its appeal is whether the trial court erred in ruling that Schnucks properly terminated its lease. The sole provision of the lease allowing early termination expressly required Schnucks to give one year prior written notice of its intent to cease business operations and terminate the lease. (Emphasis ours). Thus, to effectuate a valid termination required two elements: 1) one year notice to cease operations and 2) one year notice to terminate the lease. The uncontroverted evidence establishes that, while Schnucks did give one year’s notice of its intent to terminate the lease, it failed to give one year’s notice of its intent to cease operations before so doing. The trial court erred in finding the language in Section 27.03 to be unclear and ambiguous.

A contract is ambiguous only if its terms are susceptible of more than one meaning so that reasonable men may fairly and honestly differ in their construction of the terms. Union Center Redevelopment Corp. v. Leslie, 733 S.W.2d 6, 9[3] (Mo.App.1987). An ambiguity does not arise merely because the parties disagree how the contract should be construed. Id. The requirement that Schnucks continue its business operations during the one year notice period is contained within the same single sentence granting Schnucks the right of early termination of its leasehold interest. The requirements are joined by “and”, not “or”. We are persuaded by MRI’s argument that the word “and" connecting Schnucks’ one year prior written notice of its intent to cease operations and terminate this lease clearly requires notice of both to effectuate a valid termination of the leasehold relationship. Accord, State ex rel. Dunlap v. Hanna, 561 S.W.2d 411, 413 (Mo.App.1977) (statute’s use of “and” held to require not just one, but two tasks to be performed). Defendants do not contend here that the letter of termination contained both one year notices required by the lease as a condition for early termination. The only one year notice in the letter referred to termination but was silent as to any time frame for ceasing business. The letter was not valid termination of the lease. We therefore need not reach the issue of whether failure to continue the business for a year after the notice invalidated the notice. See Leon v. Barnsdall Zinc Co., 309 Mo. 276, 274 S.W. 699 (1925).

Allied and Schnucks have raised an additional point in their respondents’ brief in support of the trial court’s judgment. They contend that MRI failed to prove any damages in that MRI undertook to relet the premises as Schnucks' agent, but MRI failed to make reasonable efforts to replace Schnucks with another tenant. They also argue that MRI failed to allege or prove it sustained any damages caused by Schnucks’ failure to conduct continuous operation of its business on the leased premises. As to this latter contention, MRI’s damages are based upon the rent due under the still extant lease, not its damages resulting from early closing.

The trial court made extensive findings of fact related to the issue of MRI’s mitigation of its damages. These findings included that MRI had written Schnucks on July 9,1985, reasserting MRI’s position that the lease continued in force and effect and that, although MRI would consider replacement tenants, MRI had no present arrangements with any tenant to occupy the space.

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Related

MRI Northwest Rentals Investments I, Inc. v. Schnucks-Twenty-Five, Inc.
807 S.W.2d 531 (Missouri Court of Appeals, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
763 S.W.2d 375, 1989 Mo. App. LEXIS 20, 1989 WL 712, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mri-northwest-rental-investments-i-inc-v-schnucks-twenty-five-inc-moctapp-1989.