Kreger v. Francis, 94-388

Citation898 P.2d 672,271 Mont. 444
Decision Date27 July 1995
Docket NumberNo. 94-388,94-388
PartiesJeffrey KREGER and Lea Ann Kreger, Plaintiffs and Respondents, v. Daniel FRANCIS and Christina L. Francis, Defendants and Appellants.
CourtUnited States State Supreme Court of Montana

Robert M. Kampfer, Great Falls, for appellants.

Joan E. Cook, Miller & Cook, Great Falls, for respondents.

WEBER, Justice.

This is an appeal from a decision of the Eighth Judicial District Court, Cascade County granting judgment in favor of Jeffrey Kreger and Lea Ann Kreger for reasonable attorney's fees and costs incurred. We reverse.

We restate the issue on appeal:

Did the District Court err when it ruled Jeffrey and Lea Ann Kreger did not waive their rights to terminate a lease for Daniel and Christina Francis' breach of the terms of the lease when Jeffrey and Lea Ann Kreger accepted full payment of rent?

On August 1, 1993, appellants, Daniel Francis and Christina Francis (Renters) entered into a written rental agreement with respondents, Jeffrey Kreger and Lea Ann Kreger (Landlords). The lease was for a term of six months and included the following provision 9. We agree to obtain renters insurance for all property leased to us before moving into premises.

Renters applied for and obtained a policy of renters insurance on their belongings at the rented address. The policy of renters insurance was subsequently cancelled by the insurance company, effective October 1, 1993, because the Renters had a bad credit rating. Renters were unable to obtain further coverage.

On October 1, 1993, Landlords sent to Renters a 30 day Notice to Quit and Notice Terminating Rental Agreement which referenced the fact Renters were unable to obtain renters insurance as required by Section 9 of the Lease Agreement. The Landlords sent another notice to Renters on October 16, 1993, in the event the prior notice was premature given that Renters had until the end of the day, October 1, 1993, before their coverage terminated. Renters refused to vacate the premises at the end of the 30 day period. So, Landlords filed a cause of action for possession in the Justice Court.

Landlords accepted $600.00 on or about the first day of each month the Renters remained in possession--October, November and December of 1993. Renters vacated the premises at the end of December 1993, after the first trial in Justice Court.

The Justice Court ruled in favor of the Landlords and awarded costs and attorney's fees in the amount of $452.50 to the Landlords. Renters appealed to District Court and a de novo bench trial was conducted on June 14, 1994. On June 28, 1994, the District Court entered judgment for Landlords and against Renters concluding acceptance of the monthly rent from Renters by Landlords did not waive Landlords' right to terminate the Rental Agreement for the Renters' failure to obtain renters insurance. The District Court awarded costs and attorney's fees to Landlords.

From the District Court's June 28, 1994 decision, Renters appeal.

Did the District Court err when it ruled Jeffrey and Lea Ann Kreger did not waive their rights to terminate a lease for Daniel and Christina Francis' breach of the terms of the lease when Jeffrey and Lea Ann Kreger accepted full payment of rent?

The District Court found that the rent was paid current as of the date the Renters vacated the premises. The court concluded the following as a matter of law:

3. Acceptance of the monthly rent from Tenants [Renters] by the Landlord did not waive their right to terminate the Rental Agreement for the Tenants' [Renters'] failure to obtain Renters Insurance. Acceptance of the payment of rent is a waiver of a claimed breach of a Rental Agreement, only if that claimed breach is the nonpayment of rent. Section 70-24-423, MCA.

The court's interpretation of § 70-24-423, MCA, is at issue. Section 70-24-423, MCA states the following:

Waiver of landlord's right to terminate for breach. Acceptance by the landlord of full payment of rent due with knowledge of a tenant's default or acceptance by the landlord of a tenant's performance that varies from the terms of the rental agreement constitutes a waiver of the landlord's right to terminate the rental agreement for that breach unless otherwise agreed after the breach has occurred. The acceptance of partial payment of rent due does not constitute a waiver of any right.

Renters point out Landlords accepted full, current monthly rental payments from Renters for three months after the expiration of the renters insurance policy. Renters allege there was never an arrearage of rent and there was never any understanding other than that the payments were made for the current month's rent. Renters argue the plain language of § 70-24-423, MCA, provides acceptance of rent constitutes a waiver of any breach known to the landlord. Here, Landlords knew Renters' breached Section 9 of the lease prior to accepting rent. Therefore, Landlords waived this breach when they accepted full payment of rent and, thus, had no basis to evict Renters.

Renters conclude the District Court erred in awarding costs and fees to Landlords because Landlords had no grounds to bring an eviction suit against Renters. Renters request this Court reverse the District Court's judgment and award costs and fees to Renters.

Landlords argue they did not waive any breach by accepting the rent due and the District Court came to the correct conclusion of law. At no time did they agree the provision of renters insurance was waived. Landlords contend all of their conduct indicates they did not accept the varied performance of the Renters and that they intended to treat the varied performance as a default.

Landlords argue, according to Renters' analysis, all landlords must refuse payment of rent or else they forgo remedies for a breach. Additionally, Landlords contend that a proffered payment of rent must be accepted by the landlord under the landlord's duty to mitigate damages.

Our standard of review of the District Court's conclusion of law is to determine if the District Court's interpretation of the law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-475, 803 P.2d 601, 603-604.

We have held, "where the language of the statute is plain, unambiguous, direct, and certain, the statute speaks for itself." State ex rel. Palmer v. Hart (1982), 201 Mont. 526, 530, 655...

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  • City of Billings v. Bruce
    • United States
    • Montana Supreme Court
    • 29 Julio 1998
    ...is correct. See Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686; see also Kreger v. Francis (1995), 271 Mont. 444, 447, 898 P.2d 672, 674; Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603. ¶19 Since 1972, we have rev......
  • Geissler v. Sanem
    • United States
    • Montana Supreme Court
    • 18 Noviembre 1997
    ...law is correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686. See also Kreger v. Francis (1995), 271 Mont. 444, 447, 898 P.2d 672, 674; Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603-04. We will affirm a dismiss......
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    • United States
    • Montana Supreme Court
    • 2 Enero 1997
    ...correct. Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686. See also Kreger v. Francis (1995), 271 Mont. 444, 447, 898 P.2d 672, 674; Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, Issue 1 Did the District Court er......
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    • United States
    • Montana Supreme Court
    • 4 Diciembre 1997
    ...is correct. See Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686. See also Kreger v. Francis (1995), 271 Mont. 444, 447, 898 P.2d 672, 674; Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603. We have held that a judgmen......
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