Medical West Bldg. Corp. v. E. L. Zoernig & Co.

• Court: Missouri Supreme Court
• Writing for the Court: As the defendant was obviously aware, the situation which gave it the right to cancel its lease was the plaintiff's termination of Richard Zoernig's services as building manager. Although defendant points out that the correspondence from plaintiff's
• Citation: Medical West Bldg. Corp. v. E. L. Zoernig & Co., 414 S.W.2d 287 (Mo. 1967)
• Decision Date: 10 April 1967
• Docket Number: No. 51952,No. 1,51952,1
• Parties: MEDICAL WEST BUILDING CORPORATION, Plaintiff-Appellant, v. E. L. ZOERNIG & COMPANY, Defendant-Respondent

Page 287

414 S.W.2d 287

MEDICAL WEST BUILDING CORPORATION, Plaintiff-Appellant, v. E. L. ZOERNIG & COMPANY, Defendant-Respondent.

No. 51952.

Supreme Court of Missouri, Division No. 1.

April 10, 1967.

Motion for Rehearing or for Transfer to Court En Banc Denied

May 8, 1967.

Opinion Modified and Cause Remanded May 8, 1967.

Guilfoil, Caruthers, Symington, Montrey & Petzall, Rexford H. Caruthers, Gerald M. Smith, Darold E. Crotzer, Jr., St. Louis, for appellant.

William C. Maier, Charles R. Judge, Dubail, Judge & Kilker, Arnot L. Sheppard, Gentry, Bryant & Sheppard, St. Louis, for respondent.

WELBORN, Commissioner.

This is an action by Medical West Building Corporation, owner, for damages for breach of lease by E. L. Zoernig & Company, tenant. A jury returned a verdict in favor of the plaintiff for $17,220 damages, plus $3,616.20 interest. Upon motion of the defendant, the trial court set aside the verdict and entered judgment for defendant. Plaintiff has appealed.

Medical West Building Corporation was the owner of an office building located in St. Louis County. E. L. Zoernig & Company leased a suite of offices in the Medical West Building for a term of five years, from March 1, 1957 to February 28, 1962, at a rental of $400 per month. The Security Loan & Discount Corporation, in which the Zoernig Company had a financial interest and of which Richard J. Zoernig was the executive officer, had a ten-year contract with the owner to manage the building.

In February, 1958, O. S. Rudman and Ann Rudman acquired from Zoernig the majority stock of the Medical West Corporation. As a part of the transaction, the Rudmans agreed to cause Medical West to employ Richard J. Zoernig as building manager. The agreement referred to the Zoernig Company lease and then provided:

'If at any time during the term of the present lease or the renewal thereof as aforesaid, the employment of Richard J. Zoernig as Building Manager is terminated by the corporation, then the lessee shall have the right to cancel the remaining term of said lease without penalty provided notice of such cancellation is given within ninety (90) days following the effective date of termination of such employment.'

Medical West and Richard Zoernig entered into a management agreement for a one-year term, beginning February 15, 1958, with right of renewal.

In March, 1958, the new owners decided to alter the policy regarding parking facilities provided for tenants and their patients or customers. This action eventually produced the litigation reported in Bryan v. Medical West Building Corporation, Mo.App., 345 S.W.2d 389. Richard Zoernig disagreed with the new policy and declined to circulate the notice of it to the tenants.

On March 25, 1958, a meeting, called by Rudman, was held. In attendance were about fifteen tenants, who were also stockholders of Medical West, Mr. Rudman, and Selig Oxenhandler, a real estate broker who had participated in the negotiations leading to Rudman's stock purchase. Oxenhandler, although not a stockholder, had been elected vice-president of Medical West. An attorney for Medical West and an attorney for some of the tenants were also present.

According to Rudman, the tenants voiced numerous protests about Zoernig's management of the premises, including inadequate cleaning, lack of attention to complaints and varying rental charges. According to Rudman, the parking issue was discussed merely by way of explanation to the stockholders of the corporation's financial problems. Oxenhandler stated that various complaints of the tenants were aired, but that parking was discussed only insofar as the tenants were complaining that employees of tenants were occupying an excessive amount of parking space.

Testifying as a witness for the defendant, the attorney representing the stockholders stated that the parking issue was the only matter discussed at the meeting. According to him, Rudman explained the corporation's financial position and the necessity of charging for parking. A spokesman for the tenants replied that they were entitled to free parking under their leases and intended to insist upon it, regardless of the 'supposed bad condition of the finances of the corporation.' The witness stated that nothing was settled at the meeting.

The next day, Rudman and Oxenhandler met with Zoernig and told him of the complaints against him which had been voiced at the meeting. According to Rudman, Zoernig was upset, resentful of the tenants' lack of appreciation for his efforts and said that he did not wish to have anything more to do with them. Rudman quoted Zoernig as saying '(You can) have the management.' Oxenhandler testified that Zoernig was disgusted with the tenants' attitude and 'didn't care whether or not he continued to take care of the thing or do or have anything to do with most of them because * * * he felt that those that complained the most were those he did the most for.' Oxenhandler also stated that before the meeting concluded, Zoernig instructed his secretary to turn the keys over to Oxenhandler that afternoon.

Zoernig's version of the meeting was somewhat different. According to him, Oxenhandler had previously begun to take a hand in the management of the building and Zoernig had done nothing after Oxenhandler began to take over the management duties. Zoernig testified that, when Rudman and Oxenhandler came to his office, 'the very first statement that was made when they came into my office was they were surprised that I was still around, they thought I would either have been shot or chased out. The next statement was made pertaining to parking, putting in parking charges when I had represented free parking to all the tenants. I was very much disturbed at that time. The next remark was made by Mr. Rudman that he thought that perhaps my usefulness as manager had disappeared. * * * Then I just reiterated what I had been saying ever since the building had been sold, that a mistake was being made by putting in parking charges when I had represented it to the tenants it would all be free parking included in their rent and I didn't know why I should be blamed for something that the new owners wanted to do.' Zoernig denied that he stated he wanted to quit as manager.

Rudman stated that immediately after the meeting with Zoernig he asked Oxenhandler to take over the management of the building. Oxenhandler got the keys from Zoernig's secretary that afternoon and later sent out the April 1 rent notices. Subsequently, the management files were turned over to Oxenhandler by Zoernig's secretary.

On March 27, 1958, Oxenhandler presented to Zoernig for his signature a typewritten letter addressed to Medical West, stating: 'I, Richard J. Zoernig, wish to be relieved of my responsibility as building manager of the Medical West Building effective as of March 31, 1958.' Zoernig refused to sign the document.

On March 29, Oxenhandler asked Charles Judge, an attorney for the Zoernig Company and one of the original stockholders of Medical West: 'Why doesn't Richard Zoernig give up the management of the building?' Judge replied: 'If you give him a little time, have a little patience, he may come to that conclusion and be willing to step down on the basis of E. L. Zoernig moving out of the building.' Oxenhandler, according to Judge, replied: 'I believe something like that can be worked out.'

On April 11, 1958, Oxenhandler, as vice-president of Medical West, advised Richard L. Zoernig of the receipt of the records and keys. In the letter he stated: 'This action on your part is construed by this company to be your voluntary relinquishing of your duties of building manager and therefore terminates your Management Contract as of April 1, 1958.'

On April 15, 1958, on behalf of Richard Zoernig, Judge addressed a letter to Oxenhandler in which he stated:

'Your letter to Richard Zoernig of April 11, 1958 has been turned over to me for attention. Your assumption that his act of delivering to you records, keys and other items constituted a relinquishment of his duties as Building Manager is wholly unwarranted. He did these things solely because you as Vice President and Director of the Corporation requested him to do so. It is our position that his Management Contract is still in full force and effect and he stands willing to continue to perform his duties thereunder.

'If it is the desire of the Corporation to negotiate a termination of this Management Contract I will be glad to discuss this matter with you.'

On April 24, 1958, Gideon Schiller, of the law firm of Ackerman, Schiller & Lake, and acting on behalf of Medical West, wrote Judge as follows:

'This will acknowledge your letter of April 15, 1958 to S. Z. Oxenhandler concerning the Richard Zoernig matter. I have discussed this matter with Oxenhandler and I can only conclude from the facts at hand that Zoernig relinquished his duties as Building Manager of his own accord although in fact there were ample grounds for discharging him.

'Should you care to discuss the matter with me please give me a call at your convenience.'

On June 4, 1958, Judge, as attorney for Zoernig & Company, addressed a letter to Mr. Rudman as President of Medical West Building Corporation. In this letter he stated:

'Under the terms of the agreement entered into on February 3, 1958 by and between Richard J. Zoernig, Emil L. Zoernig and Charles R. Judge, first parties and O. S. Rudman and Ann Rudman, second parties, pertaining to the sale of controlling stock of Medical West Building Corporation, it was provided that if the employment of Richard J. Zoernig as building manager of Medical West Building were terminated, the lessee of Suite 203 shall have the right to cancel the remaining term of its lease without penalty upon notice given within ninety (90) days following the effective date of termination.

'Since Medical West Building Corporation has taken the position that the employment of Richard J. Zoernig as building...