Bernstein v. Seglin

• Decision Date: 17 October 1969
• Docket Number: No. 37216,37216
• Citation: 184 Neb. 673,171 N.W.2d 247
• Parties: Helen BERNSTEIN, Appellee, v. Nathan SEGLIN, Appellant.
• Court: Nebraska Supreme Court

Page 247

171 N.W.2d 247

184 Neb. 673

Helen BERNSTEIN, Appellee, v. Nathan SEGLIN, Appellant.

No. 37216.

Supreme Court of Nebraska.

Oct. 17, 1969.

Syllabus by the Court

1. A landlord may not unreasonably refuse to accept a qualified and suitable substitute tenant for the purpose of mitigating the damages recoverable from a tenant who has abandoned the leased premises prior to the expiration of the term.

2. In an action by the landlord to recover rental from a tenant who has abandoned the leased premises prior to the expiration of the term, the burden is on the tenant to prove that the landlord unreasonably failed to relet the premises and mitigate damages.

Marks, Clare, Hopkins & Rauth, Omaha, for appellant.

Kartman & Fike, Omaha, for appellee.

Heard before WHITE, C.J., and CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN, and NEWTON, JJ.

McCOWN, Justice.

This is an action for the recovery of rental on a lease. The trial court sustained a motion for a directed verdict and entered judgment for the plaintiff. The defendant has appealed.

The plaintiff, Helen Bernstein, as lessor, and the defendant, Nathan Seglin, as lessee, entered into a written lease of a business building in Omaha, Nebraska, in June 1961. The lease was for a term of 7 years commencing July 1, 1961, and terminating June 30, 1968. The lease provided for a basic rental of $200 per month plus 2 percent of gross sales exceeding $144,000 per year. No percentage rental was ever due and the percentage clause was inoperative at all times.

The lease prohibited assignment and subletting without the previous written consent of the landlord. The concluding portion of the assignment paragraph provided: 'Landlord agrees not to withhold his consent arbitrarily where the proposed assignee is a financially responsible and experienced retail grocer.' It was stipulated that the limitation of the type of business to a retail grocer was waived.

The defendant took possession under the lease July 1, 1961, and operated his business on the premises through January 1964. On January 31, 1964, the defendant Seglin sold his business to Bernard W. Sharon, and assigned the lease to Sharon. The assignment executed by the defendant and the consent to the assignment executed by the plaintiff both provided that the defendant Seglin would 'remain primarily liable to the lessor, jointly and severally with the assignee, for the payment of the rent payable by lessee for a period of 30 months from and after February 1, 1964 * * *.'

Sharon took possession of the premises February 1, 1964, and paid the rent during his 5-month occupancy. On June 30, 1964, without notice to anyone, Sharon moved out and abandoned the premises. There was no surrender of the premises nor acceptance of surrender. It is undisputed that the plaintiff was holding the defendant responsible for the rent after Sharon's departure, and that the defendant understood that fact.

Following Sharon's departure, both the plaintiff and the defendant advertised in newspapers, posted signs, and made other efforts to rerent the premises. Defendant's efforts to find a new tenant netted several contacts and interviews but only one definite prospect developed. This was a Mrs. Hubbell. The defendant then referred Mrs. Hubbell to the plaintiff. Defendant's wife testified: 'She (Mrs. Hubbell) was a prospect. She wanted to negotiate and was ready to sign a lease.' There was no testimony as to what kind of a lease or for what term or on what conditions Mrs. Hubbell was prepared to negotiate. The defendant and his wife both conceded that they did not know anything about Mrs. Hubbell's financial condition. It was conceded that Mrs. Hubbell was contemplating renting the premises for use by her son for a nursery business, but neither the plaintiff or defendant ever discussed the matter with the son or knew anything about his financial condition or business experience. The interview between the plaintiff and Mrs. Hubbell did not produce any offer or proposal from Mrs. Hubbell. After the interview, the plaintiff advised the defendant's wife by telephone that the plaintiff definitely wanted more rent and that she would just sit and wait until she got the right tenant. The defendant and his wife thereupon ceased their efforts to rerent the property.

Plaintiff conceded that she wanted a rental of $300 per month, which was the amount she had received prior to the defendant's lease. She also testified that she would have negotiated a lower rent for the right person or someone who had a good credit rating and was a successful merchant. Plaintiff continued her efforts to rerent the premises. Some of her advertisements carried an asking price in excess of $200 a month. She ultimately leased the premises effective January 1, 1966. The rental was $200 per month for the first 3 years and $240 per month thereafter, plus a provision requiring the tenant to expend a substantial amount in leasehold improvements. Thereafter the plaintiff brought this action for the recovery of rental due prior to rerenting the premises.

The defendant's theory is...