Song Lee v. Ferguson

795 P.2d 1220, 1990 Wyo. LEXIS 92, 1990 WL 121535
CourtWyoming Supreme Court
DecidedAugust 24, 1990
DocketNo. 89-246
StatusPublished
Cited by2 cases

This text of 795 P.2d 1220 (Song Lee v. Ferguson) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Song Lee v. Ferguson, 795 P.2d 1220, 1990 Wyo. LEXIS 92, 1990 WL 121535 (Wyo. 1990).

Opinion

RAPER, Justice, Retired.

Appellees sued appellant and Kim B. McCallum (not a party to this appeal) for rent allegedly due appellees on leases of premises for use as a massage parlor. Appellant's five-year lease was dated June 25, 1985. The McCallum lease, dated August 1, 1986, was made as part of a sale of appellant’s business to McCallum. Partial summary judgement against McCallum for rent covered by a promissory note to appel-lees was allowed. The trial judge held that the lease, appellees to appellant, was not surrendered and appellant was still liable for rent provided by such lease, and granted judgment accordingly.

Appellant states the issues to be:

1. Can surrender by operation of law occur from acts of the parties alone rather than by an “agreement”?
2. Can a Lessor recover deficiencies under a lease agreement when the Lessor has not made a demand for payment pursuant to the terms of the lease? Appellees frame the issues as:
1. Can the facts as found by the trial court be invoked to reverse the ruling that there was no surrender by operation of law?
2. As a matter of law, does the parties’ contract, in expressly allowing for mitigation of damages, preclude such mitigation from operating as a surrender?
3. Is it too late for the appéllant to raise a “lack of demand” defense which was not developed in the pleadings or at trial?
4. Can demand be a condition precedent, the lack of which defeats a claim for payment of money?

Since the formal findings of fact set out by the trial judge have a sound basis in the transcript of a full-blown trial held in this case, we will adopt them as our outline of the facts forming the backdrop of our decision:

[1221]*12211. The [appellees] are a partnership which owns and holds for the purpose of rental certain premises on Westland Road in Cheyenne, Wyoming, which consist of office buildings including the property involved in this matter, located at 1720 Westland Road.
2. The [appellant] Song Lee was a tenant at will for a period of time at 1710 Westland Road, another property belonging to the [appellees], and in the months preceding July, 1985, negotiated with the [appellees’] agent L.M. Cheesbrough, resulting in a lease arrangement whereby the premises at 1720 Westland Road were to be leased to the [appellant] Song Lee for a five-year period beginning in August of 1985. The lease was signed on July 25, 1985.
3. The [appellees] expended some Twenty-Two Thousand Dollars ($22,-000.00) in improving the leased premises, a substantial portion of which was for improvements to be used in the [appellant] Song Lee’s massage parlor business, “Tokyo Massage.”
4. In the spring of 1986, trouble between the [appellant] Song Lee and the City of Cheyenne, whereby criminal charges were lodged against certain individuals involved in the [appellant’s] business, resulted in the closure of Tokyo Massage.
5. The [appellant] Song Lee subsequently negotiated with the [appellees’] agent L.M. Cheesbrough towards a sublease or sale of his business, and the [appellees’] said agent indicated by letter that the [appellees] would seek to accommodate [appellant].
6. The [appellant] Song Lee on or about June 25, 1986, sold the Tokyo Massage business to the defendant [not a party to this appeal] Kim B. McCallum. The bill of sale provided that the defendant Kim B. McCallum would “assume full responsibility of lease of the building.”
7. On July 28, 1986, the [appellees] entered into a five-year lease with Kim B. McCallum, contingent upon her receiving a Massage Parlor License from the City of Cheyenne, and providing that the lease would terminate September 1,1986, should the license not be granted. By a telephone conversation on said date, the [appellant] Song Lee was apprised of the formation of the new lease.
8. The [appellees’] agent L.M. Cheesbrough sent a letter to Song Lee dated July 28, 1986, explaining that the agreement did not release Lee from his obligation but that payments received from McCallum would reduce Lee’s obligation. Lee claimed he never received this letter.
9. The defendant McCallum received a Massage Parlor License on or about September 29, 1986, and continued in the premises as a month-to-month lessee until December 18, 1986.
10. The [appellant] Song Lee did not receive notice of McCallum’s arrearages in rent payment which occurred in September and October of 1986.
11. The management of the [appel-lees’] rentals had in the fall of 1986 been taken over by Dr. John Gramlich, who wrote an undated letter early in 1987 — in the [appellant] Song Lee’s November 16, 1988 Memorandum in Opposition to [Ap-pellees’] Motion for Summary Judgment, the letter was given the date of Janu[a]ry 7, 1987 — stating to Lee that McCallum’s default “causes the lease to be your responsibility again."
12. The Song Lee lease, at paragraph 14, gives the [appellees] the right to relet in mitigation of damages without terminating the lease, and provides that the [appellant] Song Lee will pay any deficiency.
13. The [appellees] have mitigated their damages by leases of the premises to Inberg-Miller Engineers, Wyoming Centennial Marketing Association and Action Refrigeration, such that through the date of trial, [appellees] are damaged in the amount of $26,882.50.
14. At the present rate of mitigation of damages, the damages which will accrue through August of 1990 will total $5,116.00.

[1222]*1222It appears to us that the strength of appellees’ case lies in the terms of appellant’s lease with appellees. Section 14 of the lease provides for appellant’s continuing obligation to abide by the terms of the lease in the event appellant lessee should abandon or vacate the premises:

14. Vacating During Term:
Except as provided in paragraphs 10, 15 and 19 if Lessee shall abandon or vacate the leased premises before the end of the term of this lease, or shall suffer the rent to be in arrears, Lessor may at its option and without notice enter said premises, remove any signs and property of Lessee therefrom, and enter the leased premises or any part thereof as it may see fit without such retaking, voiding or terminating this lease, and for the purpose of reletting, Lessor is authorized to make any repairs or changes in or to the leased premises, at the expense of Lessee, (which will be payable to Lessor upon demand), as may be necessary or desirable for the purpose of such re-letting, and if a sum shall not be paid from such reletting to equal the monthly rental reserved and stipulated herein to be paid by Lessee, Lessee will pay such deficiency each month upon demand therefor.

This provision of the lease as found by the district judge does give the appel-lees the right to relet in mitigation of damages without termination of the lease and provides that appellant will pay any deficiency. Appellant was advised by letter by appellees that the McCallum lease would not release appellant from his obligation.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Plaza Dev. Co. v. W. Cooper Ents., L.L.C.
2014 Ohio 2418 (Ohio Court of Appeals, 2014)
Walker v. McAnnany
802 P.2d 876 (Wyoming Supreme Court, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
795 P.2d 1220, 1990 Wyo. LEXIS 92, 1990 WL 121535, Counsel Stack Legal Research, https://law.counselstack.com/opinion/song-lee-v-ferguson-wyo-1990.