South Forks Shopping Center, Inc. v. Dastmalchi, 890018

• Decision Date: 26 September 1989
• Docket Number: No. 890018,890018
• Citation: 446 N.W.2d 440
• Parties: SOUTH FORKS SHOPPING CENTER, INC., Plaintiff and Appellant, v. Yahya DASTMALCHI, individually and d/b/a Prestige Fashion Shoes, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 440

446 N.W.2d 440

SOUTH FORKS SHOPPING CENTER, INC., Plaintiff and Appellant, v. Yahya DASTMALCHI, individually and d/b/a Prestige Fashion Shoes, Defendant and Appellee.

Civ. No. 890018.

Supreme Court of North Dakota.

Sept. 26, 1989.

Vaaler, Gillig, Warcup, Woutat, Zimney & Foster, Grand Forks, for plaintiff and appellant; argued by Sandra B. Dittus, Grand Forks.

Shaft, Reiss, Ingstad & Shaft, Grand Forks, for defendant and appellee; argued by Jack W. Ingstad, Grand Forks.

MESCHKE, Justice.

South Forks Shopping Center sued to evict Yahya Dastmalchi, doing business as Prestige Shoes, from its shopping center. The county court enforced an agreement by South Forks to lease Dastmalchi other space and dismissed the eviction claim. We reverse.

On July 9, 1988, South Forks and Dastmalchi agreed upon a settlement about unpaid rents which cancelled his store lease in the shopping center, settled their litigation, and barred Dastmalchi's counterclaims. This "AGREEMENT TO SETTLEMENT OF PAST CLAIMS AND CONTINUATION OF TENANCY IN RELOCATED SPACE FOR UP TO FIVE YEARS" said:

"1.) That Yahya Dastmalchi pay South Forks $3500.00 cash in hand before temporarily reopening for business in the present store location for not longer than through July 16, 1988.

"2.) that Yahya Dastmalchi pay South Forks an additional $200.00 a day starting Monday July 11, 1988 for five days, until $1000.00 more cash is paid and be totally moved out of present store space by 7:00 AM July 18, 1988.

"3.) if conditions # 1 & # 2 are completed timely, South Forks will lease to Yahya Dastmalchi ... on a temporary basis, a 1236 square foot store space between the Diet Center and Cost Cutters Hair Care Center for Seven hunderd [sic] ($700.00) dollars a month to include rent and common area costs until 1202 square feet of the present Nelson's Hobby House store can be made available to relocate into.

"4.) provided rents are paid in a current and customary manner, South Forks will lease the above mentioned 1202 square foot store for up to five years on a month to month basis at $700.00/month for rent and common area charges.

"In the event Yahya Dastmalchi fails to fully complete steps 1 & 2 timely, this agreement which includes settlement of claims at less than 50% ($8666.22, + 1/2 of July rent and common area charges = $426.57, plus legal costs for $3500. + $1000.) shall become null and void and South Forks shall proceed for settlement of present claim in full."

Howsoever timely, Dastmalchi paid the agreed amounts, vacated his store space, and moved into the "temporary" space.

On August 2, Dastmalchi paid $700 by leaving a cashier's check at South Forks' office. At the same time, he picked up his rental statement which listed a zero balance on July 29 and showed $700 due on August 1. Still, disagreement arose about when rent was due. South Forks claimed it was due on July 18 and on the 18th of each following month. Dastmalchi claimed it was due on August 1 and on the first of each following month. The settlement had not specified a date for payment of rent.

On August 25, South Forks wrote Dastmalchi that he was in default, that he had breached the settlement agreement, and that South Forks "has no further obligation to lease" the Nelson space to him. Claiming that South Forks had anticipatorily breached the agreement by not holding the Nelson space for him, Dastmalchi paid no rent after August 2.

On October 11, South Forks sued to evict Dastmalchi. In his answer, Dastmalchi claimed that South Forks breached the settlement agreement "by allowing another tenant, in August, to occupy the space which was to be held" for him and that "due to said breach ... [South Forks] was not entitled to additional rent until it made available" the Nelson space to him. Dastmalchi also plead that "a Contract action has been commenced in ... District Court to resolve the dispute between the parties." Dastmalchi requested dismissal of South Fork's eviction complaint and "further relief as the Court may deem just."

At trial, Dastmalchi testified that his rent had been due on the first day of each month in the past and that he believed that was still true. The South Forks manager testified that, sometime after the 18th of July, he told Dastmalchi that the rent had been due on the 18th. The manager explained that the rental statement given to Dastmalchi was inaccurate. Thus, the evidence about timely payment of the first rent for the temporary space was conflicting.

The county court ruled that the rent was due on the first of each month, since it was the "custom" of South Forks to bill its tenants on the first; that Dastmalchi had paid rent "in a timely and customary manner"; and that South Forks "violated" the settlement by letting another tenant have the Nelson space. The judgment decreed that South Forks was "entitled to no additional rent until it provides the store space previously occupied by the Nelson's Hobby House, as outlined in the Agreement of July 9, 1988," and dismissed the eviction action. Dastmalchi stayed in the temporary space without paying rent.

On appeal, South Forks argued that the dismissal was clearly erroneous because rent was at least two months past due. South Forks argued that allowing Dastmalchi to remain in the temporary space without paying rent unjustly enriched him.

Dastmalchi argued that the decision was not clearly erroneous; that he had satisfied the conditions of the settlement, entitling him to the Nelson space; and that, by notifying him that he would not get the Nelson space, South Forks had anticipatorily breached the contract. Dastmalchi quoted NDCC 9-01-16:

"Enforcement of obligations--Prerequisites. Before any party to an obligation can require another party to perform any act under it, he shall fulfill all conditions precedent thereto imposed upon himself and must be able, and shall offer, to fulfill all conditions concurrent so imposed upon him on the like fulfillment by the other party, but if one party to the obligation gives notice to another before the latter is in default that he will not perform the same upon his part and does not retract such notice before the time at which performance upon his part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party."

Arguing that South Forks had not fulfilled "all conditions concurrent," Dastmalchi insisted that "it was proper for [him] to discontinue making any further rent payments until he was able to enforce South Forks' obligations." According to Dastmalchi, since he "owed no rent, due to the breach, the action for eviction was not proper."

Although South Forks did not question the power of the county court, this court is "required to take notice of jurisdictional questions relating to subject matter whether raised by any of the parties or not." In Re Estate of Brudevig, 175 N.W.2d 574, 577 (N.D.1970), overruled on other grounds, Liebelt v. Saby, 279 N.W.2d 881 (N.D.1979). Since the 1976 constitutional amendment creating a "unified judicial system," the trend has been to improve the county courts and to enlarge their jurisdiction and powers. See N.D. Const. art. VI, Sec. 1; 1981 N.D.Laws, ch. 319; 1983 N.D.Laws, ch. 352; 1985 N.D.Laws, ch. 272, Sec. 31 and ch. 338; 1987 N.D.Laws, ch. 375, Sec. 1; and Matter of Estate of Binder, 366 N.W.2d 454 (N.D.1985). Nevertheless, the authority of county courts continues to be circumscribed by statute. NDCC 27-07.1-17. There are several statutes relevant here.

Within limits, county courts are empowered to hear eviction actions:

"An action for eviction from real property irrespective of value when the amount demanded therein for rents and profits or damages does not exceed ten thousand dollars."

NDCC 27-07.1-17(1)(d). A summary action in county court to recover possession of real estate is authorized when "[a] lessee, ... fails to pay his rent for three days after the same shall be due." NDCC 33-06-01(4). The summary nature of this eviction action is tailored by narrow restrictions:

"Eviction actions not joinable with other actions--Exception--When counterclaims only interposable. An action of eviction cannot be brought in a county court in connection with any other action, except for rents and profits accrued or for damages arising by reason of the defendant's possession. No counterclaim can be interposed in such action, except as a setoff to a demand made for damages or for rents and profits."

NDCC 33-06-04. The reasons for the summary nature of an eviction action have been explained:

"The purpose of the unlawful detainer statutes is to provide the landlord with a summary, expeditious way of getting back his property when a tenant fails to pay the rent.... If a defendant were allowed to assert affirmative defenses or cross-claims which were irrelevant to the right of immediate possession, the summary character of the proceedings would be lost."

Nork v. Pacific Coast Med. Enterprises, 73 Cal.App.3d 410, 140 Cal.Rptr. 734, 735 (1977). See First Union Management, Inc. v. Slack, 36 Wash.App. 849, 679 P.2d 936, 939 (1984). Because the summary nature of the eviction action bars counterclaims (except money offsets), the county court was not authorized to grant Dastmalchi affirmative relief.

The county court exceeded its powers when it decreed specific performance of the settlement. A county court is not authorized to contrive equitable remedies in most civil actions, apart from probate, trust, and assigned matters. NDCC 27-07.1-33 and 27-07.1-17; Matter of Estate of Jones, 288 N.W.2d 758, 760 (N.D.1980). NDCC 27-07.1-33 directs that, when

"either a cross-claim or counterclaim ... asks for affirmative equitable relief, the county court shall proceed no further with a determination of the rights of the parties provided that the pleading in excess of...