Joseph v. Hustad Corp.

• Citation: 153 Mont. 121,454 P.2d 916
• Decision Date: 19 May 1969
• Docket Number: No. 11426,11426
• Parties: Eddy JOSEPH, Plaintiff and Respondent, v. HUSTAD CORPORATION, a Montana Corporation, Defendant and Appellant.
• Court: Montana Supreme Court

Page 916

454 P.2d 916

153 Mont. 121

Eddy JOSEPH, Plaintiff and Respondent, v. HUSTAD CORPORATION, a Montana Corporation, Defendant and Appellant.

No. 11426.

Supreme Court of Montana.

Submitted April 18, 1969.

Decided May 19 ,1969.

Luxan & Murfitt, Walter S. Murfitt (argued), Earl Hanson (appealed), Helena, for appellant.

C. W. Leaphart, Jr. (argued), Helena, for respondent.

BONNER, Justice.

The respondent herein, Eddy Joseph, brought this action in the district court to recover damages for a breach of covenant of quiet enjoyment contained in a lease between himself and appellant herein, Hustad Corporation. The jury returned a verdict for the respondent Joseph and assessed damages in his favor in the sum of $18,500. From that award the appellant Hustad appeals.

September 25, 1964, Joseph and Hustad entered into a written lease whereby Joseph leased from Hustad for the period December 1, 1964, to November 30, 1974, a restaurant building 66 feet by 66 feet commonly known in Helena as Scheffi's Pancake House. Among other covenants Joseph agreed to use the building exclusively as a restaurant and the Hustad Corporation as lessor agreed that 'Lessor shall at its own expense construct and maintain at all times during the terms of this lease a parking area on that portion of the premises on which the shopping center shall be erected, designated as 'Parking Area' on the plot plan hereto attached, marked 'Exhibit A'. Said parking area shall be for the joint use of all lessees of the Lessor of the premises situate within the area described in Exhibit 'B', and for the use of the customers, employees, visitors and invitees of said lessees for driveway, walking or parking purposes.' While an exhibit A was attached to the lease exhibit B was missing. Defendant's exhibit 2 at the trial was introduced as missing exhibit B. Defendant's exhibit 2 is a plot of the Husted Shopping Center as it exists on both sides of National Avenue.

The area in question is that land situate in the Hustad Shopping Center east of National Avenue, bounded on the north by Lyndale Avenue and on the south by Helena Avenue; more specifically the large parking area which lies adjacent to the pancake house. At the time the lease was signed in September 1964, the parking area had on it a small building which housed a dry cleaning establishment.

Just after the lease in question here was signed, Husted Corporation caused construction of the building now used as the pancake house, occupancy being had by Joseph on or about December 1, 1964. However, just prior to occupation by Joseph and on or about November 18, 1964, Hustad commenced construction of a building, which building is now used as a doctors' office, immediately north of the building housing the dry cleaners. Construction of the doctor's building was completed April 1965, and thereafter in May 1965, Hustad commenced construction of an office building immediately south of the dry cleaners which office building now houses a photography studio, an insurance underwriters association and a propane gas company.

No objection was made by Joseph to the Hustad Corporation to the construction of either building at the time construction commenced or during the course thereof even though Joseph had personal knowledge of what was being done. Mr. Joseph did testify he asked Wally Hustad, the brother of H. F. Hustad who is president of the Hustad Corporation, what was going on when construction commenced on the doctors' building. From the transcript it appears Wally Hustad was an independent contractor hired by the Hustad Corporation to construct the buildings, and was not an agent, officer or employee of the corporation.

Mr. Joseph further testified that other than the question put to Wally Hustad, who told him to speak to H. F. Hustad, he made no other objections to the construction of any building until March 1966, more than 16 months after he occupied the pancake house. Written notification of his objections as required by the lease was not made until April 22, 1966, through a letter from his attorney, James R. Paul.

In his complaint Joseph alleged that the parking lot situate on that portion of the Hustad Shopping Center east of National Avenue was designated to the exclusive use of himself and the dry cleaning establishment, that Hustad Corporation by building the two additional buildings deprived Joseph of the use and quiet possession of the parking facilities. He also charges that the pro rata parking facilities available to him during most business hours has been reduced from 42 spaces to 6, about which more will be said later.

The complaint prayed for damages for loss of future profits in the amount of $96,000 and for depreciation in the value of the leasehold interest in the amount of $20,000. Testimony concerning Joseph's estimation of the present worth of the leasehold interest was stricken from the record by the trial court as too speculative. No other evidence was introduced as to present value of the leasehold and, thereafter, the jury awarded damages for loss of future profits.

As specifications of error numbers 5 and 6 the appellant Hustad contends the court below erred in refusing to grant its motions for non-suit and for directed verdict. We agree with that contention.

With regard to tort law it has been said:

'In general, the tort must be in the breach of a legal duty comprising three distinct elements, to-wit: (a) Existence of legal duty from defendant to plaintiff; (b) breach of that duty; and (c) the damage as a proximate result.' Laclede Steel Co. v. Silas Mason Co., D.C., 67 F.Supp. 751, 759 (1946). See also Riggs v. Standard Oil Co., C.C., 130 F. 199; Standard Oil Co. v. Parrish, 7 Cir., 145 F. 829; Louisiana Oil Refining Corporation v. Reed, 5 Cir., 38 F.2d 159; Morris v. E. I. DuPont de Nemours & Co., 8 Cir., 68 F.2d 788.

The duty in question here was Hustad's promise under the lease to furnish parking facilities for all its lessees in its shopping center and, specifically, Mr. Joseph's pancake house. Mr. Joseph asserts Hustad breached that duty when it constructed two additional buildings on the premises which allegedly decreased parking available to him; he also asserts loss of future profits as a proximate result of that breach.

It is admitted by both parties that one of the main considerations when constructing a shopping center is the availability of adequate parking and ease of access thereto. Shopping centers exist because of an...