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Keywords

contracttriallease

contracthearingtrialsummary judgmentlease

Related Cases

C.R. Anthony Co. v. Loretto Mall Partners, 112 N.M. 504, 817 P.2d 238, 1991-NMSC-070

Facts

C.R. Anthony Company (Anthony's) brought a suit against its landlord, Loretto Mall Partners, and Dartford Company, N.V., to recover excess rent paid under a lease amendment negotiated in 1982. After Loretto purchased the mall in 1984, Anthony's began making reduced minimum rental payments when the anchor tenant, J.C. Penney, vacated the premises. An internal audit revealed that Anthony's had overpaid its percentage rental obligation by $167,971.02 based on its interpretation of the lease amendment.

C.R. Anthony Company (Anthony's) brought a suit against its landlord, Loretto Mall Partners, and Dartford Company, N.V., to recover excess rent paid under a lease amendment negotiated in 1982.

Issue

The main legal issues were whether the lease amendment was ambiguous and whether there was a mutual mistake regarding the rental obligations.

We agree with the trial court that the lease amendment contains no ambiguity. However, we believe the Mall has made a sufficient factual showing to preclude summary judgment on the question of mutual mistake.

Rule

The court held that in determining whether a term or expression is unclear, it may consider evidence of the circumstances surrounding the making of the contract. It also ruled that the lease agreement contained no ambiguity but allowed for the possibility of a mutual mistake.

We hold today that in determining whether a term or expression to which the parties have agreed is unclear, a court may hear evidence of the circumstances surrounding the making of the contract and of any relevant usage of trade, course of dealing, and course of performance.

Analysis

The court applied the rule by examining the lease amendment and the surrounding circumstances of its negotiation. It found that while the lease amendment was clear on its face, there was sufficient evidence to suggest that a mutual mistake may have occurred regarding the rental obligations, particularly in light of the parties' conduct over the years.

The court may, nonetheless, be called upon to decide if the writing, intended as the contract, is ambiguous or by mistake has stated a term contrary to the intent of the parties.

Conclusion

The Supreme Court affirmed the trial court's decision in part, reversed it in part, and remanded the case for further proceedings to address the factual issue of mutual mistake.

For these reasons, we affirm in part, reverse in part, and remand the cause to the trial court with instructions to afford the parties a full evidentiary hearing to include the question of mutual mistake.

Who won?

C.R. Anthony Company prevailed in part as the court awarded them the return of excess payments, but the issue of mutual mistake was left for further proceedings.

C.R. Anthony Company (Anthony's) against its landlord, Loretto Mall Partners, and against Dartford Company, N.V.

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