Sablan Enterprises Inc. v. New Century, Inc.

5 N. Mar. I. 144, 1997 MP 32, 1997 N. Mar. I. LEXIS 24

• Court: Supreme Court of The Commonwealth of The Northern Mariana Islands
• Decided: December 9, 1997
• Docket: Appeal No. 95-020; Civil Action No. 94-1138
• Status: Published

Opinions

LIZAMA, Special Judge:

¶1 New Century appeals from the June 9, 1995, Superior Court Order granting summary judgment in favor of Sabían Enterprises. We have jurisdiction pursuant to title 1, § 3102(a) of the Commonwealth Code. We affirm

ISSUES PRESENTED AND STANDARDS OF REVIEW

¶2 New Century raises three issues for our review:

1. Whether the Superior Court erred in concluding that New Century failed to raise a material issue of fact as to the validity or applicability of the

non-waiver clause of the lease agreement. 2. Whether the Superior Court erred in concluding that New Century failed to raise a material issue of fact as to any defective mailing of the Notice of Default.

3. Whether the Superior Court erred in concluding that New Century failed to raise a material issue of fact as to its counterclaim.¹

¶3 We review an order granting summary judgment de novo. Rios v. Marianas Pub. Land Corp., 3 N.M.I. 512, 518 (1993). We shall affirm the Superior Court’s order granting summary judgment if we determine that as to the legal basis relied upon: (1) there is no genuine issue of material fact; and (2) the trial court correctly applied the substantive law. Id.

FACTS AND PROCEDURAL BACKGROUND

¶4 Sabían Enterprises owns a two-story commercial building in Chalan Kanoa, Saipan. On March 3, 1983, Sabían Enterprises and New Century entered into a fifteen year lease agreement for a portion of this building. The lease agreement provided for a monthly rental fee of two thousand dollars with a five percent increase every five years. Rent was to be paid by the fifteenth day of each month.

¶5 On September 13,1994, a Notice of Default was sent by Sabían Enterprises to New Century. The thirty day period after notice, as set forth in the lease agreement, expired without New Century having cured its default. On October 24, 1994, Sabían Enterprises filed suit against New Century for forfeiture and termination of the lease agreement for nonpayment of rent. New Century counterclaimed that the parties had orally agreed to modify the terms of the payment of rent, and that it relied on the oral modification of the lease agreement.

¶6 On June 9,1995, the Superior Court granted summary judgment in favor of Sabían Enterprises. New Century timely appealed.

ANALYSIS

¶7 In the absence of written law or local customary law regarding landlord-tenant law, the rules of the common law, as expressed in the Restatements of Law shall be applied. 7 CMC § 3401 (1992).

A. Sabían Enterprises did not waive its right to forfeiture by continuing to accept rental payments

¶8 A tenant has an obligation to pay rent unless he is legally excused from doing so. RESTATEMENT (SECOND) OF PROPERTY (Landlord and Tenant) § 12.1 (1976). A landlord may waive his right to the prompt payment of rent by acting in a manner which leads the tenant to believe that a later date of payment than that specified in the lease is acceptable. RESTATEMENT (SECOND) OF PROPERTY (.Landlord and Tenant) § 12.1, cmt. c (1976). However, a lease that provides for a non-waiver provision preserves the landlord’s right to the payment of the rent on the due date. Id.2 In this case the lease specifically states:

Acceptance of rent by the Lessor or the Lessor’s agent shall not be deemed to be a waiver by the Lessor of any breach by the Lessee or any covenants herein contained or the Lessor’s right to re-enter for breach of condition. Waiver by the Lessor of any breach by the Lessee shall not operate to extinguish the term, covenant or condition the breach whereof has been waived nor be deemed to be a waiver of the Lessor’s right to declare a forfeiture for any other breach thereof.

Lease Agreement, part II, section F (emphasis added).

¶9 In addition, where the language of a writing is plain and precise, the court can, as a matter of law, establish the intent of the parties from the writing. Ada v. K. Sadhwani’s, Inc., 3 N.M.I. 303, 310 (1992). The lease agreement specifically states the acceptance of rent shall not be a waiver to any breach.

B. Sabían Enterprise’s Notice of Default to New Century was not defective

¶10 Whether notice is defective is a question of law, not fact. Farrell v. Brown, 729 P.2d 1090, 1095 (Idaho Ct. App. 1986).

¶11 The lease specifically provides that any notices shall be sent to New Century at the address listed in the lease or its last known address:

Any notice or demand of the Lessor or Lessee or any other person provided for or permitted by the Lessee may be given sufficiently for all purposes in writing, mailed as registered or certified mail, return receipt requested and postage fully prepaid, addressed to such party at its post office address herein specified or the last known address of such party or person, and shall be deemed conclusively to have been given on the date of such mailing ....

Lease Agreement, part II, section G (emphasis added).

¶12 The evidence in the record is clear and undisputed that notice was sent to New Century at both its addresses listed in the lease and at its last known addresses shown on the government corporation records. New Century’s registered agent signed the return receipt and Attorney Del Priore responded to the notice in writing on behalf of New Century.

¶13 Appellant argues that notice was defective because the current corporate President, Leslie Moreno, did not personally receive a copy of the Notice of Default.³ Sabían Enterprises complied with the notice required in the lease and individual notice to New Century’s President is not legally required.

¶14 Appellant also argues that the notice was defective because it was signed by Sabían Enterprise’s attorney, who was not named in the lease. There is no merit to this contention. A corporation can give notice through its attorney.

C. There is no material issue of fact as to New Century’s counterclaim

¶15 Under the terms of the lease agreement, any modifications had to be in writing:

It is hereby expressly agreed that this lease agreement contains all of the tenns, covenants, conditions and agreements between the parties hereto relating in any manner to the use or occupancy of the premises, and that no prior agreement or understanding pertaining to the same shall be valid or of any force or effect, and that the terms, cannot be altered, changed, modified, or added to excevt in writing signed by the parties hereto.

Lease Agreement, part II, section L (emphasis added).

¶16 In the counterclaim, New Century alleges that Sabían Enterprises encouraged them to invest money to refurbish the leased premises and that Sabían Enterprises agreed to accept rent on dates other than those regularly scheduled because of the renovations. Therefore, New Century claims that Sabían Enterprises is now estopped from declaring New Century in breach and default of the lease agreement.

¶17 It is undisputed that the parties never entered into any written agreements to change the terms of the lease agreement. Therefore, any oral promises which New Century relied on in changing the terms of the lease agreement are invalid since they were not written and agreed to by the parties. Courts generally give effect to integration clauses which stipulate that any modifications to the lease must be in writing. See Valley Properties, Inc. v. King’s Dep’t. Stores, Inc., 505 F.Supp. 92 (Mass. Dist. Ct. 1981).

CONCLUSION

¶18 Therefore, for the reasons stated above, we hereby AFFIRM the Superior Court’s June 9, 1995 order granting summary judgment in favor of Sabían Enterprises.

1 We will address this issue in conjunction with the applicability of the lease agreement’s provision regarding written modifications.

2 Lynaum v. Funeral Home v. Hodge, 576 So.2d 169, 170-71 (1991); Giller Industries v. Hartley, 644 S.W. 2d 183, 184 (Tex. Ct. App. 1982); Karbelnig v. Brothwell, 53 Cal. Rptr. 335, 340-41 (Cal. Dist. Ct. App. 1966). See Dunbar House Auth. v. Nesmith, 400 S.E. 2d 296, 298-300 (W. Va. 1990); Watson v. Arcadian Foods, 447 N.W.2d 477, 479 (Neb. 1989).

3 Notice to the addresses in the lease were mailed on September 15, 1994. Notice to the last known address to the corporation and its registered agent were mailed on September 26, 1994. The corporation and its registered agent received the notices on September 29, 1994. The lease provides that the notice is deemed conclusively given upon mailing, but also requires that mail be sent by certified or registered mail, return receipt requested and that New Century be given thirty days to cure. We need not resolve possible contradictions as to when notice was given because, even using the date most favorable to New Century, it is undisputed that New Century did not cure the default within 30 days.