Miller v. Gammon & Sons, Inc.

• Decision Date: 13 November 2001
• Docket Number: No. WD 58286.,WD 58286.
• Citation: 67 S.W.3d 613
• Parties: Daniel Preston MILLER, Joann O'Dwyer Revocable Trust and S. Carl Lensing, Appellants, v. GAMMON & SONS, INC., and Bill's Food, Inc., Respondents.
• Court: Missouri Court of Appeals

67 S.W.3d 613

Daniel Preston MILLER, Joann O'Dwyer Revocable Trust and S. Carl Lensing, Appellants, v. GAMMON & SONS, INC., and Bill's Food, Inc., Respondents.

No. WD 58286.

Missouri Court of Appeals, Western District.

November 13, 2001.

Paul A. Seigfreid, Mexico, for appellants.

Duane E. Schreimann, Jefferson City, Terry Michael Gammon, Respondent Pro Se, Bates City, for respondents.

Before BRECKENRIDGE, P.J., ULRICH and HOWARD, JJ.

PATRICIA BRECKENRIDGE, Judge.

Daniel Preston Miller, the JoAnn O'Dwyer Revocable Trust and S. Carl Lensing (Lessors) appeal the trial court's judgment which awarded them a portion of a month's rent under a commercial lease and denied their claims for the costs for repairs to the parking lot, prejudgment interest and attorney's fees. On appeal, they claim that the trial court erred in awarding only a portion of the monthly rental fee because the amount awarded by the court was clearly erroneous and unsupported by the evidence. Additionally, Lessors argue that the trial court erred in failing to award costs for repair to the parking lot because Bill's Food and Gammon & Sons, lessees, failed to maintain the parking lot in good condition as required by the lease. Lessors also argue that the trial court erred in failing to award statutory prejudgment interest for moneys due and payable under a written contract, because the damages were ascertainable based upon the contract rental price. Finally, Lessors argue that they should have been awarded attorney's fees because the contract provided for such.

This court affirms the trial court's judgment awarding a partial month's rent since the lease was terminated and the covenant to pay rent ceased on the termination date. Further, because the lease did not explicitly contain provisions for structural repairs, this court affirms the judgment denying Lessor's claims for the cost of repairing the parking lot. This court reverses, however, the judgment of the trial court with respect to prejudgment interest and attorney's fees and remands the case for further proceedings. Because the rental payments under the lease were fixed and ascertainable, prejudgment interest should have been awarded. Further, the court should have awarded attorney's fees based upon contractual provision for that portion of the attorney's fees associated with recovery of rent.

Statement of Facts

On appeal, this court reviews the facts in the light most favorable to the trial court's judgment. Morgan Publ'ns, Inc. v. Squire Publishers, Inc., 26 S.W.3d 164, 167 (Mo. App.2000). On August 26, 1991, Lessors, personally or through their predecessors in interest, entered into a lease of business premises with Bill's Food, Inc., as lessee. The subject of the lease was an Apple Market grocery store, including a parking lot, located in Fulton, Missouri. The terms of this original lease are not a part of the record on appeal. On June 27, 1995, Bill's Food assigned its interest in the lease to Gammon & Sons, Inc. Gammon & Sons assumed all rights, obligations and duties of Bill's Food as lessee under the lease. Under the Assignment of Lease, Bill's Food remained secondarily liable if Gammon & Sons failed to perform its obligations and duties.

Under the Assignment of Lease, the new terms of the lease with Gammon & Sons was for four years commencing on July 1, 1995, and terminating on June 30, 1999, with an option to renew for an additional term of five years. After the first renewal term, the lessee could renew for ten additional four-year terms. The lessee was required to pay $5,500 as monthly rental due on the first of each month. The lease stated that it was a "net-net-net lease," requiring the lessee to pay all taxes, assessments, and all costs and expenses relating to utilities, insurance, expenses of operation, maintenance and repair of the premises.

In early 1998, Gammon & Sons sent a letter to Lessors asking for assistance in anticipation of the opening of a Wal-Mart Super Center, which Gammon & Sons expected to affect their business. Gammon & Sons requested a 20% temporary reduction in rent to $4,400 per month from the current $5,500. It also requested that Lessors repave the parking lot and apply new striping.

In response to this request, attorney for Lessors sent a letter to Gammon & Sons, indicating that the lease required it to maintain the property in as good condition as when they acquired the property. The letter also stated the following:

Because you believe that the building and parking lot need extensive repair and maintenance, we will look to you to perform these items in the very near future. Your failure to make needed repairs are elements of breach of your lease agreement. Please maintain the premises as required. We would like to conduct an inspection in the near future and will expect significant progress to be made on the repairs.

No response to the request for reduction in the rent was contained in the letter.

On March 22, 1998, Gammon & Sons surrendered possession of the premises without paying the rent due for March. On March 23, 1998, Lessors re-let the property to a new tenant. Lessors subsequently brought suit against Gammon & Sons and Bill's Food to collect the following: (1) $5,500 for rental due for the month of March 1998; (2) $17,500 for repair of the parking lot; (3) attorney's fees; and (4) prejudgment and postjudgment interest. Lessors alleged that Gammon & Sons and Bill's Food were in default for failing or refusing to perform their obligations as required by the lease agreement. Specifically, they alleged that Gammon & Sons and Bill's Food failed to pay rent on the first of the month for March 1998, and that they failed to maintain the parking lot in good condition, as required by the lease agreement.

Bill's Food filed its answer to Lessors' first amended petition in which it alleged that the lease had been terminated and, thus, Lessors waived any claim that they were attempting to assert under the terminated lease. Alternatively, it claimed that Lessors were "estopped to seek any recovery under the lease inasmuch as they have terminated the same." Bill's Food also alleged that the termination of the lease "result[ed] in the termination of any and all rights [Lessors] may be asserting thereunder and [Lessors] may therefore not seek any recovery under the lease." Finally, Bill's Food denied any responsibility for repairing or replacing the parking lot, asserting that any repairs needed were the result of reasonable wear and tear for which Bill's Food was not responsible. Bill's Food's also filed a cross-claim in which it sought a judgment against Gammon & Sons in the event that a judgment was entered against them and for Lessors. Bill's Food asserted that in the assignment of the lease, Gammon & Sons had "agreed to assume and make all payments and perform all covenants, obligations, and conditions of the lease" and Gammon & Sons agreed to indemnify Bill's Food.

In its answer to Lessors' first amended petition, in which it generally denied Lessors' allegations, Gammon & Sons included the affirmative defense that if any damages resulted from its failure to maintain or repair the parking lot, those damages should be offset against the $30,000 it spent for capital improvements to the building, to prevent unjust enrichment. In answering Bill's Food's cross-claim, Gammon & Sons admitted the allegations with respect to its assumption of the lease and agreement to indemnify Bill's Food.

On December 7, 1999, a bench trial was held in which much of the testimony concerned the maintenance of the parking lot. On December 15, the trial court entered a judgment for Lessors and against Bill's Food in the amount of $3,903.23 for twenty-two days of rent for March 1998. The trial court also entered a judgment against Gammon & Sons on Bill's Food's cross-claim. Lessors appeal the trial court's judgment denying the full month's rent, costs for the repair of the parking lot, prejudgment interest and attorney's fees.

Standard of Review

The standard of review in this case is established by Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). The trial court's judgment will be affirmed unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. The evidence, along with all reasonable inferences, are "viewed in the light most favorable to the trial court's judgment, and all contrary evidence and inferences must be disregarded." Wildflower Cmty. Ass'n, Inc. v. Rinderknecht, 25 S.W.3d 530, 534 (Mo.App.2000). "[T]he trial court, as the trier of fact, determines the credibility of witnesses and may believe or disbelieve all or part of any witnesses' testimony." Ken Cucchi Constr., Inc. v. O'Keefe, 973 S.W.2d 520, 524 (Mo. App.1998).

Rent

In their first point, Lessors claim that the trial court erred in failing to award them $5,500, the full amount of monthly rent for March 1998. They claim that the amount awarded by the trial court was clearly erroneous and unsupported by the evidence. Lessors contend that the twenty-two days used by the court to pro-rate the rent did not correspond with the admission of Gammon & Sons nor with the evidence at trial. They argue that under the lease the full monthly rental was due on the first of each month. Gammon & Sons failed to pay the rent on the first day of March 1998, and the rent remained unpaid at the time of trial. Thus, Lessors assert that the trial court should have awarded the full month's rent of $5,500.

It is undisputed that Gammon & Sons failed to pay the rent due on the first of March, 1998, and subsequently surrendered possession of the premises. There was evidence that the surrender occurred on March 22, 1998. The issue at trial and on appeal is how that surrender impacted the obligation of Gammon & Sons and Bill's Food to pay rent for the month of March. "Under Missouri law, upon a tenant's default, a landlord...