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Keywords

damagestrialleasecommercial leasehabitability

plaintiffdefendantdamagesnegligenceappealtrialmotionsummary judgmentleasecommercial leasehabitability

Related Cases

Dealers Hobby, Inc. v. Marie Ann Realty Co., 255 N.W.2d 131

Facts

On June 10, 1959, Marie Ann Linn Realty Company leased a warehouse to Dealers Hobby, Inc. for a term of 15 years. The lease included a clause requiring the landlord to maintain the roof in good repair. On April 30, 1973, a portion of the roof collapsed after heavy rain, damaging some of the tenant's property. The tenant continued to use the warehouse during repairs and later sought damages for the loss of merchandise and retroactive rental value diminution, which the landlord contested.

On June 10, 1959 defendant Marie Ann Linn Realty Company leased a warehouse then under construction at 2150 Delaware Avenue in Des Moines, consisting of 20,000 square feet, to plaintiff Dealers Hobby, Inc. for storage purposes. The commercial lease which the parties executed was to commence in September of that year and continue for a term of 15 years at the monthly rate of $1,166.66. Included in its terms was the following clause: 'SIXTH: That the landlord shall at his own expense maintain in good repair the roof and exterior structure, except as to damage caused by the negligence of the tenants, its agents, employees, invitees or guests.'

Issue

The main legal issues were whether the doctrine of implied warranty of habitability applied to a commercial lease and the proper measure of damages for the landlord's breach of an express warranty to maintain the roof.

The primary questions presented on this appeal are: (1) whether the doctrine of implied warranty of habitability as announced in Mease v. Fox, Iowa, 200 N.W.2d 791 is applicable to a commercial lease of a partially constructed building; (2) what the proper measure of damages is for landlord's breach of an express warranty to maintain and repair the roof of a commercial warehouse; and (3) whether the trial court erred in sustaining defendants' motion for partial summary judgment and dismissing that portion of plaintiff's petition which sought damages under both implied and express warranty theories for the alleged retroactive diminution of the fair rental value.

Rule

The usual measure of damages for breach of a lessor's agreement to make repairs is the difference between the fair rental value of the premises if they had been as warranted and the fair rental value as they were during occupancy.

The usual measure of damages for breach of a lessor's agreement to make repairs or improvements is measured by the difference between the fair rental value of the premises if they had been as warranted and the fair rental value of the premises as they were during occupancy.

Analysis

The court determined that no breach of the express covenant to repair occurred until the roof collapsed, as neither party was aware of any defects prior to that event. Therefore, the tenant could only recover for damages incurred after the collapse, not for any retroactive diminution of rental value for the years prior to the incident.

It is manifest in consideration of these principles in light of the facts herein presented that no breach of the express covenant of repair occurred until April 30, 1973 when a portion of the roof collapsed at the warehouse premises. Prior to this time neither party had any knowledge of any defects in the structure. Prior to this time plaintiff suffered no harm whatsoever and to allow recovery for a retroactive diminution of the rental value for almost 14 years is in contravention of the aforementioned basic tenets of damages.

Conclusion

The court affirmed the trial court's decision, ruling that the tenant was entitled to recover for actual losses incurred after the roof collapse but not for retroactive damages related to rental value.

The court's final decision or holding in 1–2 sentences.

Who won?

The prevailing party was the landlord, as the court upheld the dismissal of the tenant's claim for retroactive diminution of rental value.

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