Kennedy v. Nelson

• Decision Date: 21 March 1966
• Docket Number: No. 7644,7644
• Citation: 76 N.M. 299,1966 NMSC 52,414 P.2d 518
• Parties: John R. KENNEDY, Plaintiff-Appellee, v. Lee V. NELSON and Pearl G. Nelson, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 518

414 P.2d 518

76 N.M. 299

John R. KENNEDY, Plaintiff-Appellee, v. Lee V. NELSON and Pearl G. Nelson, Defendants-Appellants.

No. 7644.

Supreme Court of New Mexico.

March 21, 1966.

Rehearing Denied May 27, 1966.

Anthony J. Albert, Santa Fe, Chacon & Melendez, Espanola, for appellants.

Bigbee & Byrd, John A. Mitchell, Santa Fe, for appellee.

CHAVEZ, Justice.

This appeal is from a judgment entered pursuant to a directed verdict for plaintiff-appellee, who was awarded damages for breach of a lease executed by the two parties.

Plaintiff and defendants entered into a lease on April 4, 1956, for a term of five years beginning April 7, 1956, and ending April 6, 1961. The lease was entered into with the intent that defendants would use their liquor license to operate a bar in a portion of the Lybrook Inn which plaintiff was in the process of purchasing. Defendants were to pay as rental 50% of the net profits. However, defendants were to pay a minimum rental of $200 at the completion of each month's operation, which payments were to be credited to them when they payed plaintiff the 50% of the net profits. Such credits were to be carried over during the entire term of the lease.

Under one clause of the lease, plaintiff agreed to provide space for defendants to park their house trailer, and to supply both the trailer and the barroom with light, water, heat and gas. Plaintiff-landlord also agreed to operate the remaining parts of Lybrook Inn in an orderly, clean and proper manner.

Plaintiff had an option to purchase defendants' liquor license, but his complaint concerning the option was eliminated from the case as plaintiff did not insist on a determination of this question.

On December 31, 1956, defendants wrote a letter to plaintiff, stating that they were terminating the lease due to plaintiff's failure to supply adequate water and heat, and for failure to operate the remaining parts of Lybrook Inn in a proper manner. Defendants wrote another letter to plaintiff on March 30, 1957, reasserting their termination of the lease. Defendants continued to occupy the house trailer and operate the bar until September 24, 1957.

This suit was filed by plaintiff to recover unpaid rentals for the remaining term of the lease. Defendants answered that plaintiff's failure to provide water, heat and gas, as well as improper management of the remaining parts of Lybrook Inn and threats against defendants, had constructively evicted defendants, caused termination and abandonment of the premises on September 24, 1957, and that defendants were not liable for rents after September 1957.

Defendants also set up the defenses that plaintiff had failed to mitigate damages; had refused to allow defendants to return to the premises and operate the business; and that plaintiff continuously opposed the transfer of location of the dispenser's liquor license of defendants, thus causing defendants to lose their business for a long period of time. Defendants cross-claimed for damages as a result of the constructive eviction; the failure of plaintiff to fulfill his covenants; and for plaintiff's interference with defendants' attempts to establish a business apart from Lybrook Inn. Defendants' last cross-claim was for punitive damages for plaintiff's malicious attempt to force defendants from the premises and to cause them to lose their dispenser's liquor license.

Plaintiff objected to any testimony from defendants or their witnesses concerning conditions on the premises after December 31, 1956, on the grounds that it was irrelevant and that no foundation had been laid for the evidence.

The trial court found that, if there had been constructive eviction, it had been waived by defendants as a matter of law; that the covenants in the lease were independent, and that a breach of them did not excuse performance by the defendants-lessees. The trial court sustained plaintiff's contention that punitive damages from him were not proper. These findings were set out in the trial court's statement to the jury leading to a directed verdict by the court.

The trial court awarded damages to plaintiff for the unpaid rents for the remainder of the term of the lease; however, defendants were allowed to off-set that amount by the cost of the wood and water which defendants supplied, and the amount which plaintiff received when he was able to rent the space and eventually reopen the bar. Judgment was rendered for the difference on the basis of the directed verdict.

This appeal is based on the contentions that the trial court erred when: (1) It found that defendants had not been constructively evicted as a matter of law, or, if they had been, that they had waived their defense; (2) it excluded testimony concerning the conditions of the premises after December 31, 1956; and (3) it ruled that the covenants in the lease were independent covenants and a breach of them by plaintiff did not terminate the lease.

Before considering these contentions, it is necessary to examine defendants' argument that plaintiff's cause of action should have been dismissed in accordance with § 21--1--1(41)(e), N.M.S.A., 1953 Comp., which provides that a cause of action shall be dismissed upon written motion by the defendant, that no action has been taken by plaintiff to bring such action to its final determination for two years.

Since the appeal of the instant case, this court has decided Martin v. Leonard Motor-El Paso, 75 N.M. 219, 402 P.2d 954. We there held that action taken by the filing of a motion to set the case for trial on the merits, more than two years after the filing of the complaint but prior to written motion to dismiss, prevents dismissal under the Rule. In Martin and in ...