Tsakres v. Owens, 2937

CourtSupreme Court of Alaska (US)
Citation561 P.2d 1218
Docket NumberNo. 2937,2937
PartiesGoldie TSAKRES, Appellant, v. William A. OWENS et al., Appellees.
Decision Date08 April 1977

Page 1218

561 P.2d 1218
Goldie TSAKRES, Appellant,
William A. OWENS et al., Appellees.
No. 2937.
Supreme Court of Alaska.
April 8, 1977.

Page 1219

Ernest Z. Rehbock, Anchorage, for appellant.

Richard C. Eckert, Anchorage, for appellees.


ERWIN, Justice.

This case presents several allegations of error arising from an action in which the lessor/plaintiff sought declaratory relief and damages for the withholding of possession of real property. The allegations of error all involve the interpretation given a lease which constituted the agreement between the parties concerning the subject property. The trial court ruled in favor of the lessee/defendants. The issues present in this appeal will be addressed after a statement of the facts.

William C. Wester owned a building and lot at 436 'D' Street. He leased out a portion of the building to Tex Powell, who operated a business therein known as the Carriage Inn. Tex Powell died in 1972, leaving the business to his wife Cynthia, who decided she could not run the business and therefore put it up for sale.

Cynthia Powell asked William A. Owens (appellee herein), who was a friend of the Powells, if he wanted to buy the business. Owens asked if there was a current lease on the building, and Mrs. Powell said that it had three-and-one-half years to run; however, she did not have a copy of the lease. Thereafter appellee Owens went into possession.

Woens then asked Wester for a copy of the lease and Wester refused, saying that he was going to build on the property. Thereafter Wester sent Owens an eviction notice. Wester claimed he wanted to use the space for a bar, but this use never occurred.

Mrs. Powell owned restaurant furniture which Owens was interested in buying, but before purchasing it he wanted assurance that he could stay on the property. Upon receiving the eviction notice, Owens told Mrs. Powell that he could not buy the business. Wester then told Owens that he had made a mistake by sending the eviction

Page 1220

notice. Owens at that time was ready to move out and told Wester that he could not buy the equipment and furniture with the threat of an eviction notice present.

Thereafter Owens and Wester entered into negotiation for use of the subject property. Owens testified:

Then on the 9th he (Wester) came over and he said his bookkeeper had made a mistake and I wasn't supposed to have received an eviction notice and I told him that I was ready to go and I couldn't stay there. I couldn't buy the furniture and their equipment with an eviction notice. And he said he would give me a lease until May of '73 and I said that's only 4 months, 5 months away and I can't buy this furniture and pay for it over a period of 5 or 10 years with a 4 or 5 months lease. So he-he says, I'll give you a lease until May or until a new building is built and I said, well, I have to have some sort of lease on the new building if you're going to build in May. And he said all right. I'll give you a 5-year with a 5-year option at $1.00 a square foot and I felt that I had a lease for the length of the time it would take me to pay for the furniture. 1

' Professor Joe Fedor' was hired by Wester to draw up a lease agreement. 2 The 'Lease Agreement for Carriage Inn' was executed on January 9, 1973, between William C. Wester and Zula Swanson as the lessors and William Owens, Fern Owens and Glen Dale as lessees. The lease was thereafter recorded.

Glen Dale, a partner of Owens and a signatory of the lease agreement, was present during the negotiations. His understanding was that a lease was made so the business could remain for ten years whether in the old or new building. Owens and Dale proceeded to buy fixtures and furniture from Cynthia Powell for $17,000, with terms for ten years.

Wester's interpretation of the document was different from that of Owens and Dale. Wester had the impression the document would serve Owens to 'stay' so that when construction began on the new building, Owens could exercise an option for lease in the new building. However, Wester testified that the thought of Owens having at that time a 5-year lease in the old building did not cross his mind.

With the lease Owens signed a letter of intent to be used to help Wester obtain financing for the new building. Other potential lessees were also approached and signed letters of intent.

Wester was not able to go through with his building plans, because financing did not work out. His wife Zula Swanson also died, and he 'was involved in closing the estate.' In the process of Wester's closing of Zula Swanson's estate, the subject property was sold to Goldie Tsakres (appellant herein).

John Grames, son of Goldie Tsakres, tried to develop the property for Tsakres but had no success. Grames testified that one of the difficulties to developing the property was the 'cloud' on the title created by the record of 'Carriage Inn Lease.'

Tsakres filed a complaint in superior court for forcible entry and detainer against Owens on September 12, 1974, seeking return of premises known as 436 'D' Street in Anchorage.

By her amended complaint of October 10, 1974, Tsakres asked for declaratory relief and for damages for withholding possession, alleging that a writing executed between her predecessor in title to the land and Owens must be declare void. The subject writing has the following terms:

Page 1221


PART I: This lease agreement is between Zula Swanson Wester and William C. Wester and William Owens and Fern Owens and Glen Dale for lease of the Carriage Inn at 436 'D' Street, Anchorage, Alaska.

PART II: This lease agreement is to be in effect from January 9, 1973 until May 1, 1973 or until building commences at 434 'D' Street, Anchorage, Alaska.

PART III: This lease agreement is for a rental of $500 per month payable on the first of each month, plus Lessees agree to pay their own utilities.

PART IV: Lessor agrees to offer lessees a new lease in the new building for 5 years with option to extend for additional 5 years at $1 per square foot for a 25 50 space on the alley and of the building.

Appellant Tsakres now raises two allegations of error 3 which require adjudication following the ruling of the court below favoring the defendants. The first of appellant's allegations is: The lease was...

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    ...with the method set forth in Wessells v. State, 562 P.2d 1042 (Alaska 1977), and in the concurring opinion to Tsakres v. Owens, 561 P.2d 1218 (Alaska 1977). To ascertain the reasonable expectations of the parties, we look to the language of the disputed policy provisions, the language of ot......
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    ...of words in a contract is a matter for the court." Rules v. Sturn, 661 P.2d 615, 617 n. 3 (Alaska 1983) citing Tsakres v. Owens, 561 P.2d 1218, 1222 (Alaska In order to give legal effect to the parties' reasonable expectations, the court examines the written agreement itself and also extrin......
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