AVG Partners I, LLC v. Genesis Health Clubs of Midwest, LLC
| Decision Date | 04 September 2020 |
| Docket Number | No. S-19-857.,S-19-857. |
| Citation | 948 N.W.2d 212,307 Neb. 47 |
| Parties | AVG PARTNERS I, LLC, also known as AVG Partners, appellee and cross-appellant, v. GENESIS HEALTH CLUBS OF MIDWEST, LLC, and 24 Hour Fitness USA, Inc., appellants and cross-appellees. |
| Court | Nebraska Supreme Court |
W. Patrick Betterman, P.C., L.L.O., Omaha, for appellants.
William F. Hargens and Lauren R. Goodman, of McGrath, North, Mullin & Kratz, P.C., L.L.O., Omaha, and Gregory M. Bordo and Christopher J. Petersen, of Blank Rome, L.L.P., for appellee.
After a tenant breached its written leases on two commercial properties, the landlord obtained a money judgment—based upon a jury's special verdict for "[u]npaid rent and late fees" and "[u]npaid taxes." The tenant appeals, and the landlord cross-appeals. We find no merit in the tenant's numerous arguments—challenging the landlord's standing, evidentiary rulings, damages based on lease provisions governing late fees and real estate taxes, statutory prejudgment interest,1 and expenses awarded for a trial delay caused by the tenant's last-minute discharge of its lawyer. Not reaching the cross-appeal of an evidentiary ruling, we affirm the district court's judgment.
We begin with a brief background. Additional facts will be discussed, as necessary, in the analysis section.
As landlord, AVG Partners I, LLC, also known as AVG Partners (AVG), sued its tenant's assignee, Genesis Health Clubs of Midwest, LLC, and its original tenant, 24 Hour Fitness USA, Inc. (collectively Genesis), for breaches of two commercial leases for property in Omaha, Nebraska. Each written lease was for a building that was used as a fitness club. One was located on South 145th Plaza (145th Plaza) and the other on North 118th Circle (North Circle).
In April 2017, Genesis closed the North Circle facility and vacated the premises even though the lease did not expire until October 2019. It failed to make any of the monthly $63,154.29 rent payments for April 2017 or thereafter and failed to pay property taxes. AVG sent Genesis a notice of default each month from April 2017 to April 2019.
With respect to the 145th Plaza lease, Genesis paid one-half of the $56,291.67 monthly rent due from September 2017 through June 2018. In response to the insufficient rent payments, AVG sent notices of default. Despite the notices of default, Genesis never paid the remaining half of the rent due from September 2017 through June 2018. Since June 2016, Genesis had not paid any of the property taxes levied on 145th Plaza.
The matter proceeded to a jury trial. Genesis did not dispute the amounts of monthly rent owed under the written leases. Nor was there any dispute that Genesis breached the leases by failing to pay rent and real property taxes. In Genesis’ opening statement, counsel informed the jury that there were two reasons why AVG was not owed all the money it claimed: AVG's failure to mitigate the loss and its failure to give the required notice.
The jury returned a special verdict in AVG's favor. Regarding the North Circle property, it found that AVG met its burden of proving Genesis breached the lease agreement, causing AVG damages of $1,657,800 for unpaid rent and late fees from April 1, 2017, to the date of the verdict and of $264,937.47 for unpaid taxes payable to that date. The jury found that Genesis did not meet its burden of proving AVG failed to take reasonable steps to minimize its damages. Regarding the property at 145th Plaza, the jury found that AVG met its burden of proving Genesis breached the lease agreement. According to the verdict, AVG's damages were $303,974.96 in unpaid rent and late fees from September 20, 2017, to the date of the verdict and $236,745.77 in unpaid taxes payable to that date. The court entered judgment on the verdict and further awarded prejudgment interest.
Genesis appealed, and AVG cross-appealed. We moved the case to our docket.2
Genesis assigned 14 errors, most of which contained multiple subparts. An alleged error must be both specifically assigned and specifically argued in the brief of the party asserting the error to be considered by an appellate court.3 We address only those errors both assigned and argued.
Genesis alleges, consolidated and restated, that the court erred in (1) failing to find that AVG lacked standing because it failed to prove its ownership of the properties at issue, (2) awarding prejudgment interest, (3) failing to reduce the special verdict for penalty interest on taxes and late fees for both properties and failing to grant Genesis a new trial on late fees, (4) admitting certain exhibits and testimony into evidence, and (5) awarding sanctions of $69,179.19.
On cross-appeal, AVG assigns that the court erred in sustaining Genesis’ hearsay objection to the admission of exhibit 132.
Standing is a jurisdictional component of a party's case because only a party who has standing may invoke the jurisdiction of a court.4 The question of jurisdiction is a question of law, upon which an appellate court reaches a conclusion independent of the trial court.5
A directed verdict is proper at the close of all the evidence only when reasonable minds cannot differ and can draw but one conclusion from the evidence, that is, when an issue should be decided as a matter of law.6 In reviewing a trial court's ruling on a motion for directed verdict, an appellate court must treat the motion as an admission of the truth of all competent evidence submitted on behalf of the party against whom the motion is directed; such being the case, the party against whom the motion is directed is entitled to have every controverted fact resolved in its favor and to have the benefit of every inference which can reasonably be deduced from the evidence.7
An appellate court reviews a denial of a motion for new trial or, in the alternative, to alter or amend the judgment, for an abuse of discretion.8
When the Nebraska Evidence Rules commit the evidentiary question at issue to the discretion of the trial court, an appellate court reviews the admissibility of evidence for an abuse of discretion.9 Apart from rulings under the residual hearsay exception, an appellate court reviews for clear error the factual findings underpinning a trial court's hearsay ruling and reviews de novo the court's ultimate determination to admit evidence over a hearsay objection or exclude evidence on hearsay grounds.10
Awards of prejudgment interest are reviewed de novo.11
When reviewing a jury verdict, the appellate court considers the evidence and resolves evidentiary conflicts in favor of the successful party.12 A jury verdict may not be set aside unless clearly wrong, and it is sufficient if there is competent evidence presented to the jury upon which it could find for the successful party.13
Appellate review of a district court's use of inherent power is for an abuse of discretion.14
Genesis moved for a directed verdict on the basis that there was no evidence of an assignment of the lessor's interest. Genesis’ counsel noted that there was no deed showing the conveyance of the leased property to AVG and moved to dismiss on the ground that AVG did not have standing. The court overruled the motion, stating that the evidence as a whole demonstrated AVG had the right to enforce the agreements and collect rent. The court also overruled Genesis’ posttrial motion to set aside the verdict and judgment and motion for new trial asserting that AVG failed to prove the assignments.
Genesis argues that AVG's claims fail, because AVG did not prove an assignment of the written leases to it. And in the absence of the assignment, it challenges AVG's standing. A party invoking a court's or tribunal's jurisdiction bears the burden of establishing the elements of standing.15 Standing requires that a litigant have such a personal stake in the outcome of a controversy as to warrant invocation of a court's jurisdiction and justify exercise of the court's remedial powers on the litigant's behalf.16 As discussed below, the evidence supported AVG's status as the landlord under the leases, and as the landlord, AVG obviously had a personal stake in this action.
This is an action for two claims of breach of a written contract. A lease is a species of contract for the possession and profits of land and tenements, either for life or for a certain period of time, or during the pleasure of the parties, and the essential elements of a contract must be present.17
In an action for rent, it is sufficient to show a contract with plaintiff and a holding under him or her; plaintiff's title or right of possession is immaterial.18 Generally the relation of landlord and tenant is founded upon express contract, but such relation may be presumed from the conduct of the parties in the premises.19 One in exclusive possession of the real estate of another with the latter's knowledge, in the absence of all evidence on the subject, will be presumed in possession by the owner's permission.20 It is well settled that a tenant cannot, while occupying the premises, dispute his or her landlord's title.21 And the estoppel of a tenant to deny the title of his or her landlord extends to everyone in privity with the landlord, and it inures to the benefit of any person to whom the landlord's title may pass, and continues until possession is actually surrendered.22
Genesis emphasizes the absence of a document assigning the leases, but it was not essential. There is no general rule of evidence that a party must produce the best evidence which the nature of the case permits.23 Thus, we have explained that there is no hierarchy of evidence.24 Here, the evidence at trial demonstrated Genesis’ understanding that AVG was its landlord under the leases; there was no evidence to the...
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