Scott v. Prazma

• Citation: 86 A.L.R.3d 338,555 P.2d 571
• Decision Date: 25 October 1976
• Docket Number: No. 4599,4599
• Parties: John E. SCOTT, Jr., Appellant (Plaintiff below), v. Donald B. PRAZMA, Appellee (Defendant below), and City of Casper (Defendant below).
• Court: United States State Supreme Court of Wyoming

Page 571

555 P.2d 571

86 A.L.R.3d 338

John E. SCOTT, Jr., Appellant (Plaintiff below), v. Donald B. PRAZMA, Appellee (Defendant below), and City of Casper (Defendant below).

No. 4599.

Supreme Court of Wyoming.

Oct. 25, 1976.

Fred W. Layman, Casper, signed the brief and appeared in oral argument on behalf of the appellant.

Donald E. Chapin, Casper, signed the brief and appeared in oral argument on behalf of the appellee.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

RAPER, Justice.

The appellant-plaintiff Scott asked the district court for a declaratory judgment to determine the respective obligations of the plaintiff and the appellee-defendant, Prazma, under a commercial building lease arising because of demands made by the City of Casper under the City Building Code and safety regulations requiring conformity or vacation of the leased premises by the defendant. Plaintiff additionally claimed rentals accruing under the lease agreement, following defendant's quitting of the premises. From a judgment favoring the defendant, the plaintiff has appealed. ¹

The plaintiff-lessor claims that work on the building required by the building inspector was the obligation of the defendant-lessee under the terms of the lease which stipulate:

'It is understood and agreed by and between the parties that the Lessor shall not be required to make any repairs to the building or to the premises during the full term of this lease. The Lessee covenants and agrees that he will, at his own cost and expense, keep in good repair and condition, reasonable wear and tear alone excepted, the building and premises hereby leased during the full term of this lease, and that he will keep the buildings and premises hereinbefore described in a neat, clean and sanitary condition and will, at his own cost and expense, replace any glass in windows and doors that may become cracked or broken and, except for reasonable wear and tear and damage by fire or other unavoidable casualties, will at all times, at his own cost and expense, keep said premises in as good condition and repair as they are now.

'The Lessee covenants and agrees that he will, during the full term of this lease, manage and operate such business in a proper, lawful, businesslike manner and will abide by all the laws, rules and regulations of all governing bodies, Federal, State or municipal or any other, having jurisdiction over any of such businesses.'

Contract provisions other than those quoted will be mentioned as we come to them.

The defendant Prazma claims that the action of the City of Casper requiring extensive work on the building and plaintiff's intractable refusal to correct the structural condition accordingly, amounted to his constructive eviction from the premises and relieves him of any further liability; he secondarily asserts that plaintiff failed to mitigate damages.

We shall hold that there was a constructive eviction.

Plaintiff was the owner of a vacant building in Casper, Wyoming, in January of 1972. Defendant is an automobile body repairman then looking for a place to establish a new business. The parties met, negotiated and on February 4, 1972, entered into a lease of plaintiff's building for a period of ten (10) years at a rental of $700.00 per month. On March 1 of that year, defendant Prazma commenced the body shop business and continued to pursue his trade in the leased premises until August 30, 1974, when he permanently left and turned over possession of the building to plaintiff.

The first problem related to the building surfaced on receipt by both of the parties of a copy of a December 5, 1973, letter ² from Fire Inspector Weckwerth of the City, in which he notified Leon Norris, the Building Inspector, that the roof of the leased building was leaking water onto live wires, the heat in the office was too close to the floor, the rain gutters were deteriorating, permitting water from the roof to enter live electrical installations, and that the hazardous conditions must be corrected for the safety of customers, employees and neighbors. Chief Weckwerth determined that the occupancy of the building should be handled as a dangerous building as provided by the Dangerous Building Code. Plaintiff's only discussion with the Fire Chief was to say the problems were defendant's, not his. There followed a memorandum and letters from the City of Casper on the condition of the building, and on January 15, 1974, a letter, ³ from City Building Inspector Norris to the appellant specifying certain work needed to be done, including 'the whole building needs upgrading' and with a mandate that if the work was not done within 60 days, the building would be ordered vacated.

Extensive remodeling of a major sort was directed by the Building Inspector according to a January 31, 1974 memorandum of the Building Inspector. The specifications there set out for remodeling, ⁴ among others, provided that all wooden framing around the front windows and the roof must be replaced, the latter for two reasons: (1) the existing roof would collapse in 20 minutes if fire were to occur, and (2) the roof leaked, causing water to drip into the electrical system. Additionally, eaves were to be replaced. It was also noted that existing brick walls were crumbling and leaning due to the erosion of the mortar.

Again, nothing was done by either party, although they did meet to discuss the contents of the January 15, 1974 letter from Mr. Norris to plaintiff and the remodeling specifications. Following a consistent pattern, plaintiff's interest was only to reassert his opinion that defendant should do the work required and that the City was nitpicking.

The matter came to a confrontation upon receipt by the parties of an April 17, 1974 letter ⁵ from Leon Norris, Chief Building Inspector, to Prazma Paint & Auto Body, Inc., in which, amongst other things, it was stated that:

'Also, it was noticed that since the last inspection, a large fracture has occurred in the west wall showing inadequate strength to resist wind pressure.

'At this inspection I was able to occupy the attic space for an inspection of the roof joists. The roof joists exceed the allowable span for 2 8 material by eight (8) feet and show signs of cracking and failure.'

The order demanded that:

'Although they (roof joists) have withstood the wind and snow load for many years, each year and every load they become a little weaker. It is my order that this building not be occupied through another winter.

'* * * By order of the Building Official, this work shall be completed by September 1, 1974. * * *' (Emphasis added.)

Following that letter, defendant gave notice on April 18, 1974, that he would evacuate the building on September 1, 1974.

It is obvious throughout the transcript of testimony and the exhibits that the building was in a badly deteriorated state, sorely in need of extensive structural repairs at a cost estimated and acknowledged to be about $60,000.00 for a new roof and roof structure alone. A basic difference between the litigants and a matter which was resolved favorably to the defendant by the trial court and is now the prime consideration of this court, is the obligation of the respective parties for the work necessary to be done for continued occupancy of the building by defendant. We will mention other facts necessary as we progress with the opinion. The question simplified is: Who, under the lease had the obligation to accomplish and pay for the massive rebuilding required by public edict? If the question is answered that it was the lessor's obligation, was there a constructive ejectment?

In 22 A.L.R.3d 521, appears an Annotation, 'Who, As Between Landlord and Tenant, Must Make, or Bear Expense of, Alterations, Improvements, or Repairs Ordered by Public Authorities.' As a general proposition, the annotation concludes that in most cases the holding depends upon an interpretation of the lease agreement between the landlord and tenant. We have found no case which holds categorically that either the lessor or the lessee is bound to make such repairs but each case must stand on its own. The annotation view is also ours and so we proceed from there.

The controlling rule depends upon the extent of defendant's duty in his covenants to repair and at the end of the term yield the premises 'in as good condition and repair as when he took them, reasonable wear and tear and (d) amages (sic) by the elements alone excepted,' united with the lease clause that he 'abide by all the laws rules and regulations of all governing bodies, Federal, State or municipal.' The right of the City Building Inspector to order use of the building discontinued if work be not done is not attacked and is not an issue here.

In 1 American Law of Property, 1952, § 3.80, pp. 353-354, it is said in excellent summary that:

'If the lessee does not expressly covenant to repair, it would seem clear that he generally should be under no duty to make alterations and repairs required by governmental authority in order to conform the premises to health and safety laws. Any changes likely to be ordered for this purpose would be beyond the scope of the tenant's common law duty to repair, and the expenses of compliance are properly regarded either as capital expenditures or as necessary carrying charges to be paid out of the rent. 'Where the lessee covenants to repair, the question of who should bear the cost of compliance depends upon the nature of the alteration or improvement and the reason for requiring it. If the order involves mere repairs which the lessee would normally be required to make under his covenant, he should bear the cost. Likewise, the burden is on the lessee where the alteration is required only because of the particular use which he is making of the premises, although it may be questioned whether even in this case the courts would place the burden of extensive and lasting improvements on the lessee, except...