C.I.I.S. Partners v. Miller, 87CA0408

• Decision Date: 28 April 1988
• Docket Number: No. 87CA0408,87CA0408
• Citation: 762 P.2d 700
• Parties: C.I.I.S. PARTNERS, a partnership; and Western Meadows, Ltd., a limited partnership, Plaintiffs-Appellants, v. Gregory MILLER and Donald Moses, Defendants-Appellees. . IV
• Court: Colorado Court of Appeals

Page 700

762 P.2d 700

C.I.I.S. PARTNERS, a partnership; and Western Meadows Ltd., a limited partnership, Plaintiffs-Appellants, v. Gregory MILLER and Donald Moses, Defendants-Appellees.

No. 87CA0408.

Colorado Court of Appeals Div. IV.

April 28, 1988.

Rehearing Denied May 26, 1988.

Certiorari Denied Oct. 17, 1988.

Stevens & Littman, Andrew C. Littman, Boulder, for plaintiffs-appellants.

Grant, Bernard, Lyons & Gaddis, Richard N. Lyons, Longmont, for defendant-appellee Donald Moses.

No appearance for defendant-appellee Gregory Miller.

TURSI, Judge.

C.I.I.S. Partners and Western Meadows, Ltd. (landlords) appeal the summary judgment dismissing their complaint against Gregory Miller and Donald Moses (guarantors). We affirm as to Miller and reverse as to Moses.

U-Plumb-It Corporation (tenant) leased spaces 5 and 6 in landlords' shopping center. Miller and Moses were officers and alleged shareholders and directors of tenant. Since landlords were unfamiliar with Miller and tenant had no history as an ongoing business entity, landlords required Moses to guarantee payments under the lease. Miller also signed the guaranty which provided: "To accept lessee's corporate signature lessor has required and undersigned hereby personally guarantees all of lessee's obligations contained in this lease." The guaranty was an addendum to the lease.

Tenant decided to move to a different location in the shopping center. Moses, as secretary of tenant corporation, negotiated an addendum to the lease with landlords which released spaces 5 and 6, substituted spaces 2 and 3, and raised the monthly rent about $100. Tenant moved to the new location then defaulted on the lease and vacated the premises.

Landlords sued tenant and guarantors to enforce the lease and guaranty. Guarantors and landlords both moved for partial summary judgment on the guaranty. Guarantors cited Green Shoe Manufacturing Co. v. Farber, 712 P.2d 1014 (Colo.1986) and asserted that, as a matter of law, the surrender of the demised premises and leasing of new premises was not a modification of an existing lease, but rather was a new lease and that guarantors did not guarantee the new lease. Landlords maintained that when the parties executed the lease addendum, they intended to amend the old lease and did not intend to create a new lease.

The trial court, relying on Green Shoe Manufacturing Co. v. Farber, supra, determined that the addendum created a new lease by completely changing the leased premises. It concluded that guarantors were not liable under the new lease and granted summary judgment in their favor.

It later appeared that tenant had become a defunct corporation. Accordingly, the trial court dismissed the claim against tenant on landlords' motion and entered final judgment.

I

Landlords assert that a change of premises within the shopping center alone was not enough to discharge guarantors' liability on the theory that a new lease had been formed. They maintain that in Green Shoe Manufacturing Co. v. Farber, supra, there were three factors that combined to transform the modification into a new lease.

While the court in Green Shoe discussed three factors that worked in combination, it primarily stated:

"Since the demised premises are basic elements of a lease, a change in those premises, at some point, must result in the creation of a new lease. While we do not attempt to draw that line here, it is clear that where no part of the original premises is covered by the new agreement, that new agreement goes beyond a mere modification of the original...."

Green Shoe Manufacturing Co. v. Farber, supra.

Here, no part of the original premises remained as part of the agreement pursuant to the addendum. Therefore, we agree with the trial court that a new lease was created by the addendum.

II

Landlords also contend that the trial court erred by entering summary judgment in favor of Moses since he consented to the alterations of his guarantor obligation, and therefore, his guarantor's liability was not discharged. We agree.

In general, when the principal obligation is materially altered to the detriment of the guarantor, without the...