Cheetah Props. 1, LLC v. Panther Pressure Testers, Inc.

• Decision Date: 26 May 2016
• Docket Number: No. 20150198.,20150198.
• Citation: 879 N.W.2d 423
• Parties: CHEETAH PROPERTIES 1, LLC, Plaintiff and Appellant v. PANTHER PRESSURE TESTERS, INC., Defendant and Appellee.
• Court: North Dakota Supreme Court

879 N.W.2d 423

CHEETAH PROPERTIES 1, LLC, Plaintiff and Appellant

v.PANTHER PRESSURE TESTERS, INC., Defendant and Appellee.

No. 20150198.

Supreme Court of North Dakota.

May 26, 2016.

Lisa M. Dynneson (argued), Williston, ND, for plaintiff and appellant.

Matthew J. Kelly, Bozeman, MT, for defendant and appellee; submitted on brief.

McEVERS, Justice.

[¶ 1] Cheetah Properties 1, LLC appeals from a district court judgment finding Panther Pressure Testers, Inc. did not willfully hold over on a commercial lease agreement for the purpose of awarding double damages, and from a district court order denying it an award of reasonable attorneys' fees. We affirm the district court's judgment concluding Cheetah was not entitled to an award of double damages under N.D.C.C. § 32–03–28

. We reverse the district court's order denying attorneys' fees and remand for proceedings consistent with this opinion.

I

[¶ 2] Cheetah Properties 1, LLC and Panther Pressure Testers, Inc. entered into a commercial lease agreement with an initial term that commenced on April 15, 2014, and ended on December 31, 2014. The parties negotiated monthly rent was due on the first of each month. The lease provided for late fees of $100 per day, starting on the fifth day of the month, if Panther did not timely pay rent. The lease contained a renewal provision that provided the lease shall automatically renew for successive one-year terms, until either party provided the other with written notice that the lease shall terminate. The lease provided that the written notice “must be received no later than the first day of the month sixty (60) days in advance of the month in which the Lease shall be terminated by either party.” Among Cheetah's remedies in the event of a default, the lease agreement provided the tenant agree to pay the cost of reasonable attorneys' fees in connection with recovering possession of the property.

[¶ 3] On January 19, 2015, Cheetah brought an eviction action to recover possession of the property under

N.D.C.C. § 47–32–01(4)

. In the complaint, Cheetah sought damages for: (1) delinquent charges for late payment of rent owed up to December 31, 2014; (2) for Panther's willful holdover “in an amount double the yearly value of the Premises for the time of Defendant[']s withholding” under N.D.C.C. § 32–03–28 ; and (3) for any physical damage to the property caused by Panther vacating the premises. Cheetah also sought an award of reasonable attorneys' fees under the lease. Panther vacated the property by January 31, 2015.

[¶ 4] According to testimony, on October 17, 2014, Cheetah provided Panther the required sixty-day notice under the lease not to extend the lease beyond the initial term, which ended December 31, 2014. On November 18, 2014, Panther requested to extend its tenancy four months beyond the end of the initial term. On December 10, 2014, Cheetah rejected Panther's request for a four-month extension. However, Cheetah offered to extend the tenancy for an additional month to January 31, 2015, on conditions that (1) Panther bring its delinquent rent current; and (2) Panther timely make the January 2015 rent payment. Cheetah requested Panther confirm in writing its agreement to the conditions. As to the first condition, the letter specifically stated: “Panther is presently delinquent with the rent payment for the month of December.” The letter did not reference any delinquency regarding the November rent payment. Testimony revealed that, as of December 10, 2014, Panther had not paid rent and late fees for November or December. On December 31, 2014, Panther delivered two $22,000 checks to Cheetah. Cheetah applied the payment to delinquent rents for November and December.

[¶ 5] According to testimony, Cheetah did not receive January rent from Panther when it became due. On January 6, 2015, Cheetah served Panther with notice of intent to evict. In the notice, Cheetah alleged Panther defaulted under the terms of the lease by holding over after the expiration of the lease on December 31, 2014, and demanded that Panther return possession of the property to Cheetah. Panther delivered an additional $22,000 check to Cheetah for January rent. Cheetah held the check, but did not deposit it.

[¶ 6] At the eviction hearing, Panther argued it mistakenly held over. According to Panther, it held over under the belief that making a January rent payment allowed occupancy until January 31, 2015. The district court returned lawful possession of the property to Cheetah and awarded it $22,000 for January 2015 rent and $8,200 for delinquent rent and fees under the lease. The district court declined to impose double damages under N.D.C.C. § 32–03–28

based on its finding that Panther's holding over was not willful. After the district court entered its order for judgment, Cheetah moved for an award of reasonable attorneys' fees under the lease and under N.D.C.C. § 28–26–01(1), N.D.C.C. § 47–16–13.6, N.D.R.Civ.P. 54(e), and N.D.R.Ct. 3.2. The district court denied Cheetah's request for an award of reasonable attorneys' fees. Cheetah appeals from the district court's judgment and the order denying an award of reasonable attorneys' fees.

II

[¶ 7] Cheetah argues the district court's finding that Panther's holding over was not willful for the purposes of awarding double damages under N.D.C.C. § 32–03–28

is clearly erroneous. The parties do not dispute that Cheetah was entitled to possession under N.D.C.C. § 47–32–01(4).

[¶ 8] “An eviction to recover possession of land may be maintained when a lessee holds over after a lease termination or expiration of the lessee's term or fails to pay rent for three days after the rent is due.” Gasic v. Bosworth, 2014 ND 85, ¶ 7, 845 N.W.2d 306

; see N.D.C.C. § 47–32–01(4). Section 32–03–28, N.D.C.C., provides:

Damages for Tenant's willful holding over.

For willfully holding over real property by a tenant, after the end of the term and after notice of intention to evict has been duly given and demand of possession made, the measure of damages is double the yearly value of the property for the time of withholding, in addition to compensation for the detriment occasioned thereby.

[¶ 9] A determination of whether conduct is “willful” is “generally considered a fact question to be determined by the trier of fact.” Smith v. Kulig, 2005 ND 93, ¶ 12, 696 N.W.2d 521

. “In an action tried without a jury, a district court's findings of fact are governed by the clearly erroneous standard of review under N.D.R.Civ.P. 52(a).” Nelson v. Johnson, 2010 ND 23, ¶ 31, 778 N.W.2d 773. “A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support the finding, or if, on the entire record, we are left with a definite and firm conviction the district court made a mistake.” Id. “A district court's choice between two permissible views of the weight of the evidence is not clearly erroneous.” Id. “On appeal, we do not reweigh conflicts in the evidence, and we give due regard to the district court's opportunity to judge the credibility of the witnesses.” Id.

[¶ 10] The district court concluded Panther held over, but found the hold over was not willful for purposes of awarding Cheetah double damages under N.D.C.C. § 32–03–28

. The district court reasoned:

I'm not going to find that there was a wrongful withholding. I think that at some point we all have to maintain some common sense about what's going on here. There's communications going back, and forth between the lawyers. I'm not going to punish Panther by reading an overly persnickety view of those letters.... But they paid the rent, they've paid the January rent. I'm not going to award double the damages.

We must affirm the district court's finding that Panther's holding over was not willful for the purpose of awarding Cheetah statutory damages under N.D.C.C. § 32–03–28

unless that finding is clearly erroneous. See N.D.R.Civ.P. 52(a)(6).

[¶ 11] Section 32–03–28, N.D.C.C

., does not define a “willful” holding over, and we have not had an opportunity to interpret what constitutes a “willful” holding over under N.D.C.C. § 32–03–28. “Statutory interpretation is a question of law, which is fully reviewable on appeal.” Nelson, 2010 ND 23, ¶ 12, 778 N.W.2d 773. Words used in a statute are given their plain, ordinary, and commonly understood meaning unless defined by statute or unless a contrary intention plainly appears. N.D.C.C. § 1–02–02. “Whenever the meaning of a word or phrase is defined in any statute, such definition is applicable to the same word or phrase wherever it occurs in the same or subsequent statutes, except when a contrary intention plainly appears.” N.D.C.C. § 1–01–09. “In construing statutes, we consider the context of the statutes and the purposes for which they were enacted.” Nelson, 2010 ND 23, ¶ 12, 778 N.W.2d 773 ; see also

Van Klootwyk v. Arman, 477 N.W.2d 590, 591–92 (N.D.1991) (holding “our primary objective is to ascertain the intent of the legislature by looking at the language of the statute itself and giving it its plain, ordinary and commonly understood meaning”).

[¶ 12] While this Court has not interpreted “willful” conduct in the context of holding over under N.D.C.C. § 32–03–28

, it has in other various civil contexts. See, e.g.,

Muldoon v. Workforce Safety and Ins. Fund, 2012 ND 244, ¶ 13, 823 N.W.2d 761 (defining willful conduct as “ ‘conduct engaged in intentionally and not inadvertently’ ”) (quoting Forbes v. Workforce Safety and Ins. Fund, 2006 ND 208, ¶ 13, 722 N.W.2d 536 ); Fettig v. Workforce Safety and Ins., 2007 ND 23, ¶ 13, 728 N.W.2d 301 (stating that “[f]or purposes of this statute's civil penalties, we have ‘defined “willfully” as conduct engaged in intentionally and not inadvertently’ ”).

[¶ 13] “Willful” conduct is defined in the North Dakota Century Code in various civil contexts. See N.D.C.C. §§ 13–04.1–08.1(6)

, 13–05–06.1(6) ; 13–08–14.1(6) (providing “a person engages in conduct ‘willfully’ if the person acted...