Eidelman v. Walker & Dunlop, Inc.

• Decision Date: 17 May 1972
• Docket Number: No. 342,342
• Citation: 290 A.2d 780,265 Md. 538
• Parties: Nathan EIDELMAN et al. v. WALKER & DUNLOP, INC.
• Court: Maryland Court of Appeals

Page 538

265 Md. 538

290 A.2d 780

Nathan EIDELMAN et al. v. WALKER & DUNLOP, INC.

No. 342.

Court of Appeals of Maryland.

May 17, 1972.

Philip O. Foard, Baltimore (David Monoker, George W. White, Jr., and Buckmaster, White, Mindel & Clarke, Baltimore, on the brief), for appellants.

Joseph I. Huesman, Baltimore (Lerch & Huesman, Baltimore, on the brief), for appellee.

Argued before BARNES, McWILLIAMS, FINAN, ^* SINGLEY, SMITH and DIGGES, JJ.

SMITH, Judge.

We here have cross-appeals relative to the liability of guarantors of a lease for a drugstore in a shopping center. The premises were vacated after a receiver was appointed for the lessee.

Appellee and cross-appellant, Walker & Dunlop, Inc. (Walker & Dunlop), acted as landlord, including the bringing of suit in this case, for Pikesville Shopping Center at 1402 Reisterstown Road, Pikesville. On December 29, 1964, a lease was made to Ideal Drugs, Inc. (Ideal). Appellants and cross-appellees, Albert Pearlman and Nathan Eidelman, joined in the lease for the purpose of guaranteeing performance of all Ideal's obligations under the lease. Eidelman was president of Ideal.

The lease was for a period of eight years beginning January 1, 1965. The leased property was to be used 'for no other purpose' than a drugstore as defined in Pearlman was the owner of drugstores in the Washington area. He supplied financial assistance and credit standing with the trade. Eidelman, a pharmacist, managed the business.

the lease. Rent was $8400 annually payable in advance in monthly installments of $700. In addition, the tenant was to pay a proportionate part of the cost of lighting and maintenance of the parking area.

The business did not prosper. The Circuit Court for Baltimore County appointed a receiver. The receiver forwarded the key to the front door of the leased area to Walker & Dunlop on September 3, 1968. He advised that one other key was being left in the possession of another tenant in the shopping center 'in the event that it was necessary for someone to enter the premises because of any emergency.' A subtenant of Ideal occupied a part of the premises at a rental of $200 per month. The receiver advised Walker & Dunlop that he was writing to what subtenant stating that the receiver would not accept payment of any rent in the future from the subtenant and that all future dealings of the subtenant relative to the premises should be with the landlord. Prior to this, there had been a sale by the receiver of the contents of the store, including equipment.

On November 26, 1968, Walker & Dunlop advised Eidelman and Pearlman 'as guarantors of the lease * * * that (the) lease (was) terminated as of November 30, 1968, and that repairs to these premises in an estimated sum of $7200.00 (were) necessary,' the premises having been 'left a shambles after the inventory, furniture and fixtures of Ideal Drugs, Inc., were sold.' Demand for repairs was made. The guarantors were advised of the intent to hold them 'responsible, in addition to the repairs * * *, for all back rent, maintenance and utility charges which (were) unpaid, as well as all damages (the landlord might) sustain for loss of rentals, et cetera, until the premises (were) re-occupied by a tenant.' The lease obliged the tenant upon termination to deliver up The store was re-rented as of May 1, 1970. The subtenant of Ideal continued to pay $200 per month up to that time.

the premises 'in as good condition and repair as the same (were) at the commencement of said term, loss by fire or other casualty, defects inherent in construction, ordinary wear, decay and depreciation and any repairs which the Lessor (might be) responsible for by the lease only excepted.'

Suit was brought against the guarantors on behalf of the landlord for loss in rent up to the time of re-renting and the cost of repairs. Judge MacDaniel, who heard the case without a jury, found against the landlord on the matter of repairs, saying:

'The Court in this case was presented with evidence from the landlord that showed quite frankly that there was damage done by the tenant but the presentation of evidence left the Court in a position that it is absolutely impossible to make a determination on that evidence presented by the landlord as to which part of the damages were the responsibility of the tenant and which part was merely necessary to place the premises in a rentable condition for a new tenant, not necessarily similar to that of the original tenant.'

He found in favor of the landlord, entering judgment in the amount of $11,540 for rent and parking lot maintenance charges. He declined to allow interest on the arrearages in rent, stating that 'this (was) discretionary with the Court and the Court (was) disallowing any interest.'

Neither party is happy. The guarantors claim that there should have been no judgment against them. The landlord contends that interest on the rent should have been allowed and that judgment for the cost of repairs should have been entered in its favor.

THE RENT

No contention is made that the computations on which Judge MacDaniel based his decision are in error on either the rent or the parking lot charges. Rather, the guarantors argue that the trial judge 'erred in not finding that the legal effect of the landlord's actions after abandonment of the premises constituted a termination of the lease agreement.' They also raise the point that '(t)he trial court erred in determining that the landlord, after taking over complete control of the premises, was under no duty to mitigate its damages and that the date of re-letting to a new tenant fixed the amount of damages due and owing as the amount of rent stipulated in the lease for the period the premises were unoccupied,' contending that 'the uncontradicted evidence showed that the landlord refused to consider or allow any new tenants to take over, except for a substantial increase of rent, even though there were a number willing to take over on the same terms and conditions contained in the subjece lease,' and claiming also that 'the landlord did rent the premises for a substantial increase in rent, creating a sizeable surplus over the balance of the defaulting tenant's term, but with no credit being allowed.'

The contentions relative to mitigation of damages must fall by the wayside. First of all, the evidence does not bear out the contentions of the guarantors. More important, however, in this instance is the fact that in Maryland the majority rule prevails which is that a landlord is under no obligation to mitigate damages. Judge (now Chief Judge) Hammond said for the Court on this subject in McNally v. Moser, 210 Md. 127, 122 A.2d 555 (1956):

'It is generally held that a landlord, where a tenant has vacated the leased premises, is under no duty to seek a new tenant but may let the premises lie idle and recover the rent without taking steps to lessen the damages. See cases collected in the annotations in 40 A.L.R. 190 and See to this effect relative to the majority rule Annot., 21 A.L.R.3d 534, 541, 546 (1968).

126 A.L.R. 1219. It is stated in the first annotation that in all but two jurisdictions the courts have adopted this view. This Court seems to have agreed. See Adreon v. Hawkins, 4 Har. & J. 319; Oldewurtel v. Wiesenfeld, 97 Md. 165, 176, 54 A. 969; Biggs v. Stueler, 93 Md. 100-111, 48 A. 727; and Gomprecht v. Dunleer Co., 164 Md. 653, 659, 165 A. 710.' Id. at 141, 122 A.2d at 563.

Re-entry by a landlord when a tenant has abandoned the premises does not relieve a tenant of his liability under his lease. Oldewurtel v. Wiesenfeld, 97 Md. 165, 176, 54 A. 969 (1903). The original lease was a contract. Therefore, there must be a contract in the nature of an assent by the landlord to the surrender of the premises by the tenant before it can be said that there has been a surrender of the premises. Biggs v. Stueler, 93 Md. 100, 112, 48 A. 727 ...