Sealy v. Physicians & Surgeons Hosp., Inc.

480 So. 2d 832
CourtLouisiana Court of Appeal
DecidedDecember 4, 1985
Docket17312-CA
StatusPublished
Cited by6 cases

This text of 480 So. 2d 832 (Sealy v. Physicians & Surgeons Hosp., Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sealy v. Physicians & Surgeons Hosp., Inc., 480 So. 2d 832 (La. Ct. App. 1985).

Opinion

480 So.2d 832 (1985)

SEALY (PINES ROAD) a Louisiana Partnership in Commendam, Plaintiff-Appellee,
v.
PHYSICIANS & SURGEONS HOSPITAL, INC., Defendant-Appellant.

No. 17312-CA.

Court of Appeal of Louisiana, Second Circuit.

December 4, 1985.
Rehearing Denied January 10, 1986.
Writ Denied March 7, 1986.

*833 James A. Van Hook, Sr., Shreveport, for defendant-appellant.

Wiener, Weiss, Madison & Howell by James R. Madison, Shreveport, for plaintiff-appellee.

Before MARVIN, JASPER E. JONES and FRED W. JONES, Jr., JJ.

MARVIN, Judge.

From a judgment enforcing an extended or renewed lease in favor of its lessor, Sealy, the hospital appeals, contending that it did not intend, and did not validly exercise its option, to renew the term of a written lease other than to a mere holding over or month-to-month term, and that in any event, any "lease" that extended after expiration of the primary term of the written lease was not enforceable because the rent was not certain and determinate and was not agreed to by it and Sealy.

These issues present mixed questions of law and fact and depend primarily upon dealings of the parties during and after the primary term of the written lease. Sealy answered the hospital's appeal and seeks to increase the award of attorney fees for legal services rendered on appeal. We amend and affirm.

FACTS

Effective January 1, 1980, another lessor leased to the hospital for a three-year term at a fixed rent premises in the Huntington Office Park in Shreveport. The hospital intended to staff, equip, and operate a medical clinic in the building. Sealy later purchased the building and the lease. The lease contained these pertinent provisions which we emphasize:

15. Holding Over. Any holding over by Tenant ... after the expiration of this lease shall operate and be construed as a tenancy from month to month at a monthly rental of one and one-half times the amount of the [primary term rent]. No receipt of money by Landlord from *834 Tenant or other act or omission of Landlord after the expiration of this lease shall reinstate or extend this lease or affect any prior notice given by Landlord to Tenant, and no reinstatement or extension shall be valid unless it is in writing and signed by Landlord and Tenant.
23. Entirety of Lease. It is expressly agreed ... that there are, and were, no verbal ... agreements or promises pertaining thereto not incorporated in writing herein, and it is likewise agreed that this lease shall not be ... amended or extended otherwise than as provided herein, unless it is done in writing by the proper authority.
31. Option. It is agreed that Tenant shall have the option to renew this lease for an additional term of five (5) years, with the understanding that Landlord reserves the right to increase or decrease the monthly square foot amount based on the Consumer Price Index as computed by the Department of Labor (or its successors) after date hereof, by giving Landlord written notice of its election to exercise this right at least ninety (90) days prior to the expiration of the original or any renewal term.

The hospital timely paid the monthly rent during the primary term but did not occupy the premises even though it continued attempts to implement its plan to operate a clinic. On September 8, 1982, more than 90 days before the end of the primary term, the hospital's executive director wrote to Sealy:

In accordance with the terms of our lease, please accept this letter as notification that we desire to extend our option to renew our lease for an additional term of three (3) years. (Emphasis ours.)

This letter was not an unconditional exercise of the option to renew because the lease provided that timely exercise of the option would result in a five-year renewal term. This letter is an offer to renew the written lease for an additional term of three years. CC Art. 1927.

On November 8, 1982, Sealy's property manager replied to the hospital's offer:

We have received and accepted your letter of notification that you desire to extend your lease ... for an additional term of three years. (Emphasis ours.)

As we shall show, as amplified by the further dealings and conduct of the parties, this letter was an acceptance of the hospital's offer to renew or reinstate the lease for a three-year term beginning January 1, 1983.

On December 10, 1982, and still within the primary term of the lease, Sealy's property manager wrote the hospital's executive director "confirming" the three-year renewal term and advising that the monthly rent for that term, according to the provision in the lease making the Consumer Price Index applicable to the renewal term, would be $2,013, approximately $500 more than the fixed monthly rent for the primary term.[1]

This letter was immediately presented by the hospital to its financial officer. This officer testified that he was not aware that the hospital had considered exercising the option until after he received a copy of Sealy's letter of December 10, 1982. This officer telephoned Sealy's property manager and requested that Sealy provide the formula from which the CPI increase was calculated. Sealy complied in a letter dated December 15, 1982.

After reviewing Sealy's written calculations and explanation, the hospital's financial officer, on about December 28, 1982, again telephoned Sealy's property manager. He did not object to Sealy's method of *835 calculation, but asked for some reduction in the increase of the rent for the renewal term because he considered the rent increase "rather excessive" for the unoccupied premises. Sealy's property manager said she did not have authority to negotiate rent, and suggested that the hospital should make its request in writing. She suggested that the hospital pay the increased rent for January 1983 because it was "already in the computer," and that if Sealy later granted the reduction Sealy would give credit for that payment.

The hospital paid Sealy the increased rent for the first month of the renewal term and wrote Sealy on January 3, 1983, that:

We would appreciate it if you would review the computation for the new monthly rental. As you are aware, we have been unable to recruit a physician for this space. We want to continue to lease the space but feel that the increase of over 31% may be excessive in light of the fact that the space is vacant. If possible, we would like to renegotiate a lower increase than your proposal.

Sealy responded in a letter of January 17, 1983, agreeing to reduce the rent increase by 50 percent, effective until January 1, 1984, or until the building was occupied. The hospital did not respond to Sealy's January 17 letter.

The hospital also timely paid the increased rent for February without the reduction mentioned in Sealy's January 17 letter and on February 14 wrote Sealy that it desired to terminate the lease.[2] The hospital sent a check for $586 representing the difference between the stipulated rental figure in the "holding over" clause (1½ times the primary term rental) and the $2,013 monthly rental for the renewal term calculated by Sealy using the CPI. Sealy later returned the check and demanded the $2,013 each month until this lawsuit was filed in June 1983 to enforce the lease.

OFFER AND ACCEPTANCE: EXERCISE OF THE "OPTION"

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480 So. 2d 832, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sealy-v-physicians-surgeons-hosp-inc-lactapp-1985.