Butler Plaza, LLC v. Curtis, Appeal No. 2018AP1612
| Decision Date | 25 April 2019 |
| Docket Number | Appeal No. 2018AP1612 |
| Citation | 928 N.W.2d 812 (Table),2019 WI App 26,387 Wis.2d 686 |
| Parties | BUTLER PLAZA, LLC, Plaintiff-Respondent, v. David CURTIS and Maurice Goodwin, Defendants-Appellants. |
| Court | Wisconsin Court of Appeals |
¶1 David Curtis and Maurice Goodwin (whom I will sometimes refer to collectively as "the tenants") appeal a money judgment entered by the Dane County Circuit Court in favor of their former landlord, Butler Plaza, LLC. Butler Plaza initiated this action to recover unpaid rent after the tenants vacated the premises. Curtis and Goodwin contend that Butler Plaza accepted their surrender of the premises, thereby releasing them from further liability for rent. The tenants further assert that the circuit court’s finding that Butler Plaza made efforts to mitigate damages was clearly erroneous. Because I conclude that Butler Plaza did not accept the tenants' surrender of the premises, and the circuit court’s finding that Butler Plaza made efforts to mitigate damages was not clearly erroneous, the judgment of the circuit court is affirmed.
¶2 The pertinent facts are undisputed.
¶3 In September 2017, the tenants entered into a residential lease with Butler Plaza. The tenancy began on September 1, 2017, and was to terminate on July 31, 2018. The rental fee under the lease agreement totaled $ 1,331.00 per month. The lease agreement specified that "[n]o uncaged pets are allowed in any apartment under any circumstances without the prior written approval of the landlord."
¶4 In November 2017, the tenants purchased a dog and brought it to the premises. The tenants notified Butler Plaza by email that they had purchased the dog, and Butler Plaza responded that the lease agreement prohibited pets without prior written approval of the landlord. Following numerous additional emails between the parties concerning whether the tenants could keep the dog on the premises, the tenants sent to Butler Plaza an email terminating the lease. That email included the following pertinent language:
¶5 Butler Plaza responded to that email as follows:
¶6 The tenants vacated the premises by December 31, 2017. The tenants completed a move-out form and returned the keys to the premises to Butler Plaza.
¶7 In January 2018, Butler Plaza rerented the premises. The new tenancy began on January 22, 2018, and was to terminate on July 30, 2018, meaning that the new lease did not extend beyond the term of the lease with the original tenants. The rental fee under the new lease agreement totaled $ 1,075.00 per month.
¶8 After rerenting the premises, Butler Plaza sent to Curtis and Goodwin a letter demanding $ 2,555.00, a sum "represent[ing] the difference of rent owed and rent that will be received with the new lease signed." The tenants refused to pay, and in February 2018, Butler Plaza initiated this action to recover that amount.
¶9 In April 2018, a Dane County Circuit Court Commissioner entered a money judgment in favor of Butler Plaza. Butler Plaza requested a trial de novo pursuant to WIS. STAT. § 757.69(8). Following a two-day trial de novo, the Dane County Circuit Court entered a money judgment in the amount of $ 2,124.10 in favor of Butler Plaza.
¶10 The tenants appeal.
¶11 I refer to other material facts in the following Discussion.
¶12 Curtis and Goodwin argue that Butler Plaza expressly agreed to accept surrender of the premises and released them from further liability under the lease agreement. The tenants characterize their email terminating the lease as an offer to vacate the premises and Butler Plaza’s response to that email as an acceptance of that offer. Additionally, the tenants assert that the circuit court erroneously found that Butler Plaza met its burden of proof under WIS. STAT. § 704.29(3) that it made efforts to mitigate damages.
¶13 I conclude that Butler Plaza did not accept the tenants' surrender of the premises. Instead, Butler Plaza elected to mitigate damages by rerenting the premises. I also conclude that the circuit court’s finding that Butler Plaza made efforts to mitigate those damages was not clearly erroneous.
¶14 To resolve the question of whether Butler Plaza accepted the tenants' surrender of the premises, the provisions of WIS. STAT. § 704.29 must be applied to the undisputed facts. That presents a question of law subject to de novo review. See Vander Wielen v. Van Asten , 2005 WI App 220, ¶10, 287 Wis. 2d 726, 706 N.W.2d 123.
¶15 Whether a landlord has made efforts to mitigate damages is a question of fact. This court upholds the circuit court’s findings of fact unless those are clearly erroneous. See Ross v. Smigelski , 42 Wis. 2d 185, 198, 166 N.W.2d 243 (1969). "[A] finding of fact is clearly erroneous when ‘it is against the great weight and clear preponderance of the evidence.’ " Phelps v. Physicians Ins. Co. of Wisconsin , 2009 WI 74, ¶39, 319 Wis. 2d 1, 768 N.W.2d 615 (quoting State v. Arias , 2008 WI 84, ¶12, 311 Wis. 2d 358, 752 N.W.2d 748 ).
¶16 An action to recover unpaid rent is governed by WIS. STAT. § 704.29. Section 704.29 provides in pertinent part that:
If a tenant unjustifiably removes from the premises prior to the effective date for termination of the tenant’s tenancy and defaults in payment of rent ... the landlord can recover rent and damages except amounts which the landlord could mitigate in accordance with this section, unless the landlord has expressly agreed to accept a surrender of the premises and end the tenant’s liability.
Sec. 704.29(1). Accordingly, when a tenant unjustifiably removes from the premises before the expiration of the lease, the landlord has the right to elect between the following "mutually exclusive choices":
(1) [A]ccept the tenant’s surrender and ... re-let the[ ] [premises] for the landlord’s own account, thereby releasing the tenant from any further liability for rent, or (2) notify the tenant that [the landlord] is ... re-letting the premises for the tenant’s benefit and therefore the monies received from the successor tenancy will be fully credited to the initial tenant’s obligation under the lease.
CCS N. Henry, LLC v. Tully , 2001 WI App 8, ¶11, 13, 240 Wis. 2d 534, 624 N.W.2d 847. The tenant’s liability for the breach thus depends on whether the landlord accepts the tenant’s surrender of the premises, "either in fact or as implied at law." Id. , ¶10. If the landlord rerents the premises for the initial tenant’s account, the original tenant remains responsible for the rent due under the original lease until its term has concluded. Id. , ¶11.
¶17 "The right to elect which course he [or she] will pursue remains with the landlord until he [or she] makes his [or her] election by taking some step which clearly evidences an intent to make a choice between the two inconsistent remedies ...." Id. , ¶13 (quoting First Wisconsin Tr. Co. v. L. Wiemann Co. , 93 Wis. 2d 258, 271, 286 N.W.2d 360 (1980) ). Certain acts, including "the mere entry and taking possession of the premises," are "equivocal" and do not constitute an acceptance of surrender of the premises. Id. ; see also WIS. STAT. § 704.29(4)(a) and (b). Certain acts by the landlord are "privileged" under § 704.29(4). These acts "do not defeat the landlord’s right to recover rent and damages and do not constitute an acceptance of surrender of the premises." Sec. 704.29(4). Notably, § 704.29(4)(d) provides that "[a]ny ... act which is reasonably subject to interpretation as being in mitigation of rent or damages and which does not unequivocally demonstrate an intent to release the defaulting tenant" is "privileged." Sec. 704.29(4)(d).
¶18 If a tenant has vacated the premises and the landlord has not accepted the tenant’s surrender, the landlord is obligated to rerent the premises to mitigate damages. WIS. STAT. § 704.29(2) ; Tully , 240 Wis. 2d 534, ¶13, 240 Wis. 2d 534 ; see also First Wisconsin , 93 Wis. 2d at 271. In an action by the landlord to recover rent, "the amount of recovery is reduced by the net rent obtainable by reasonable efforts to rerent the premises." Sec. 704.29(2)(b).
¶19 Pursuant to WIS. STAT. § 704.29(3), the landlord has the burden to allege and prove that he or she "has made efforts to comply" with § 704.29. Sec. 704.29(3). If the landlord makes that showing, the burden shifts to the tenant to prove that the landlord’s efforts were not reasonable. Id. "[R]easonable efforts" are "those steps that the landlord would have taken to rent the premises if they had been vacated in due course ...." Sec. 704.29(2)(a). Additionally, the tenant must prove that "any terms and conditions upon which the landlord has in fact rerented were not reasonable." Sec. 704.29(3). Further, the tenant must prove "the amount that could have been obtained by reasonable efforts to mitigate by rerenting." Id.
¶20 I now consider whether Butler Plaza took possession of the premises for the purposes of mitigating damages or accepted the tenants' surrender of the premises, thereby releasing them from further liability under the lease.
¶21 For the following reasons, I conclude that Butler Plaza elected to take action in mitigation...
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