ROBERT YEE AND SHIRLEY YEE, APPELLANTS,
v. HOWARD WEISS, INDIVIDUALLY AND DOING BUSINESS AS RENO SPARKS R.V. AND
AUTO CENTER, INC. AND RENO SPARKS R. V. AND AUTO SERVICE CENTER, INC.,
A NEVADA CORPORATION, RESPONDENTS
No. 24340
July 7, 1994
877 P.2d 510
Appeal from a judgment following a bench trial. Second
Judicial District Court, Washoe County; Peter I. Breen, Judge.
Landlords brought action against business tenant and its owner'
for breach of lease. The district court entered judgment for tenant and
its owner, and landlords appealed. The supreme court held that: (1) no
constructive eviction occurred, but (2) trial court did not clearly err
in determining that tenant's owner did not intend to be personally liable
on lease. ,
Reversed in part, affirmed in part, and remanded.
STEFFEN, J., joined in the majority opinion and
agreed with SPRINGER, J., who separately concurred.
Richard G. Hill, Reno, for Appellants.
David C. McElhinney, Reno, for Respondents.
1. LANDLORD AND TENANT.
Tenant was not constructively evicted by landlords' failure to remedy
difficulties tenant experienced in finding adequate parking, despite tenant's
verbal complaints to landlords. Tenant provided no proof, other than his
own testimony, that his business was affected by lack of parking, and
lease did not specifically require landlords to satisfy each tenant's
nonexclusive use of the parking area.
2. LANDLORD AND TENANT.
When constructive eviction occurs, tenant must treat landlord's interference
as eviction and vacate premises within reasonable time.
3. LANDLORD AND TENANT.
No constructive eviction results if tenant continues in possession, even
though tenant is disturbed in beneficial enjoyment of the premises.
4. LANDLORD AND TENANT.
To prove constructive eviction from business premises, tenant must show
that landlord's actions or inactions caused premises to be entirely unfit
for use for which they were leased.
5. ESTOPPEL
Tenant was bound by estoppel certificate, providing that as of date of
sale of leased premises there were no existing problems regarding enforceability
of the lease, even though he did not read certificate before he signed
it.
6. APPEAL AND ERROR.
District court did not clearly err in determining that tenant did not
intend to be made personally liable on lease by means of his second signature
following printed word "individual."
OPINION
Per Curiam:
[Headnote 1]
This is an appeal from a decision of the district court finding constructive
eviction in a commercial lease. For reasons stated below, we hold that
no constructive eviction occurred in this case.
FACTS
Appellants Robert and Shirley Yee ("the Yees") became the owners
of a large parcel of commercial real estate in Reno in early 1991. Respondent
Howard Weiss ("Weiss"), doing business as Reno Sparks R.V. and
Auto Service Center, Inc., was a tenant of the Yees at this commercial
property.
Prior to the Yees' ownership of the property, Weiss, as president of Reno
Sparks R.V. and Auto Service Center, Inc., entered into a commercial lease
in 1988 with the previous owner of the property, Mattingly Investments,
Inc. Weiss signed the lease in his capacity as president and a second
time at the bottom of the page after the handprinted word "INDIVIDUAL"
The lease, which is the subject of this appeal, encompassed 6,331 square
feet of space to be used as a repair center for cars and R..V.s. The term
of the lease was ten years with a rent of $3,798.60 per month with adjustments
for the consumer price index. The lease provided for the "nonexclusive
right to use, in common with other parties occupying the buildings or
projects, the parking areas and driveways. . . subject to reasonable rules
and regulations as Landlord may from time to time prescribe." At
the time Weiss took possession of the premises in December 1988, the only
other tenant was Gibralter Transmission.
Six months after Weiss took possession, he began to experience parking
problems, making it difficult for his customers to park their R. V.s or
maneuver them into the repair bays. Weiss complained to the landlord,
Mattingly Investments, Inc., but the landlord did nothing to alleviate
the problems. However, Weiss testified that the landlord told him that
something would be done in the future if the problems continued.
The Yees became the owners of the property by way of a property exchange
in February 1991. Prior to closing, an agent gave each tenant a written
estoppel certificate. Paragraph six of the certificate provided that all
conditions of the lease to be performed by the landlord and necessary
to the enforceability of the lease had been satisfied, except as noted
by the tenant. In addition, paragraph seven of the certificate stated
that there were no uncured defaults by the landlord under the lease and
the tenant knew of no conditions which, with notice, would constitute
a default, unless otherwise noted. Weiss signed the certificate January
29, 1991. Following both paragraphs six and seven on his certificate is
the typed word "none." He did not make note of the parking problems,
though he testified that he: verbally informed an agent representing the
Yees. After the Yees took possession,
Weiss informed the Yees' Reno agent, Rick LeMay ("LeMay"), that
if something was not done about the parking situation, he would be forced
to terminate his tenancy.
Over a year later, on April 24, 1992, Weiss sent the Yees a letter informing
them that he intended to vacate the premises. Weiss gave the following
reasons for terminating the lease: (1) the Yees had leased the premises
to competing businesses; (2) a wall, which was not in the original plans
(but which existed when he moved in), obstructed his view of his shop;
and (3) parking in the complex was inadequate to the point that his business
was substantially affected. After Weiss vacated the premises, the Yees
filed a complaint for damages for breach of contract, unjust enrichment,
fraud, and accrued rent from both before and after Weiss vacated the premises.
The complaint named Weiss both' individually and in his capacity as president
of Reno Sparks R.Y. and Auto Service Center.
A two-day bench trial was held. Weiss testified that the parking situation
had deteriorated to the point th!lt his business was failing. However,
Weiss testified that he had no business records to substantiate his claims
of a substantial loss in business due to the parking problems. He also
testified that prior to vacating, he had paid less rent than was due on
the lease. Finally, he testified that he had not intended to become a
co-tenant on the lease by signing his name a second time after the handprinted
word '.' INDIVID U AL. "
The district court held that Weiss himself was not a co-tenant despite
the fact that he had signed the lease twice, and therefore, he was not
individually liable. In addition, the court concluded that the Yees' failure
to remedy the parking situation constituted constructive eviction under
Nevada law. The court held that Weiss had given adequate warning to the
Yees; therefore, the Yees should have known of the parking problems and
acted upon them. The court also held that the Yees could not rely on the
estoppel certificate in light of Weiss' testimony that he had not filled
out the certificate and that his signature had been obtained through misrepresentation.
We now conclude that although the district court correctly held that Weiss
was not individually liable on the lease, the court erred in holding that
the Yees constructively evicted Weiss and that they could not rely on
the estoppel certificate signed by Weiss.
DISCUSSION
[Headnotes 2, 3]
Constructive eviction is a well-established concept in this state. We
have held that constructive eviction occurs when, through the actions
or inaction of the landlord, the whole or a substantial part of the premises
is rendered unfit for occupancy 'for the purpose for which it was leased.
Las Vegas Oriental v. Sabella's of Nev., 97 Nev. 311, 313, 630 P.2d 255,
256 (1981) (failure to provide adequate heating and air conditioning to
restaurant and lounge area was constructive eviction when those areas
were an integral portion of the business). When constructive eviction
occurs, the tenant must treat the landlord's interference as an eviction
and vacate the premises within a reasonable time. Portal Enterprises,
Inc. v. Cahoon, 102 Nev. 107, 109, 715 P.2d 1324, 1326 (1986) (approximately
three months considered reasonable). No constructive eviction results
if the tenant continues in possession even though disturbed in the beneficial
enjoyment of the premises. Baley & Selover v. All Amer. Van, 97 Nev.
370, 373, 632 P.2d 723, 724 (1981) (retaining premises for two years after
an inconvenient situation resulted due to other tenants' use of parking
lot negated possibility of constructive eviction).
In the instant case, the district court held that constructive eviction
resulted from the Yees' failure to implement regulations to maintain proper
traffic flow and this failure materially interfered with Weiss' right
to exercise his nonexclusive use of the parking lot. The district court
based its decision on Weiss' testimony concerning the parking situation
and his verbal complaints to the Yees' agent, as well as LeMay's testimony
that he had observed the parking area in a crowded condition on several
occasions.
We disagree that there was sufficient evidence to support the district
court's conclusions. We note that Weiss provided the court with no concrete
proof that his business was substantially and adversely affected by the
parking situation. The only proof he provided was his own testimony. In
addition, the lease provided for Weiss' nonexclusive use of the parking
area. The lease did not specifically require the Yees to control the parking
situation in order to satisfy each tenant's nonexclusive use of the parking
area. We cannot conclude from the evidence that Weiss was constructively
evicted from the premises simply because he found the parking situation
less than convenient.
[Headnote 4]
In order to show constructive eviction of a business, it is necessary
to provide more persuasive evidence than simply verbal complaints. The
tenant must show that the landlord's actions or inactions caused the premises
to be entirely unfit for the use for which the tenant leased them. Las
Vegas Oriental, 97 Nev. at
.313, 630 P.2d at 256. We cannot conclude from the evidence presented
that such was the case here. Accordingly, we hold that the district court
erred in concluding that the Yees constructively evicted Weiss.
[Headnote 5]
The district court also held that the Yees were not entitled to rely on
the estoppel certificate signed by Weiss in light of Weiss' testimony
that he had not filled out the certificate and that his signature has
been obtained by misrepresentation. We disagree.
Paragraph eighteen of the lease states that a tenant will provide, at
the request of the landlord, an estoppel certificate that may be relied
upon by any prospective purchaser. Weiss signed the lease and is therefore
bound by this provision. He did not testify that the contents of the lease
were misrepresented to him. However, Weiss testified that he did not read
the estoppel certificate prior to signing it. This certificate, which
Weiss signed but failed to read, provided that there were no existing
problems regarding the enforceability of the lease.
Courts have consistently held that one is bound by any document one signs
in spite of any ignorance of the document's content, providing there has
been no misrepresentation. See, e. g., John Call Engineering v. Manti
City Corp., 743 P.2d 1205 (Utah 1987); Skagit State Bank v. Rasmussen,
745 P.2d 37 (Wash. 1987). In addition, the Restatement (Second) of Contracts
§ 211 (1981) provides:
A recipient's fault in not knowing or discovering the facts before making
the contract does not make his reliance unjustified unless it amounts
to a failure to act in good faith and in accordance with reasonable standards
of fair dealing.
The comments to § 211 note that if the recipient should have discovered
the falsity by making a cursory examination, his reliance is clearly not
justified and he is not entitled to relief; he is expected to use his
senses and not rely blindly on the maker's assertions. Id. at cmt. b.
Weiss testified that he had the estoppel certificate in his possession,
but failed to make even a cursory examination of it. Had the document
been lengthy, his failure to examine it would have been understandable.
Yet this document was one page in length with a clear heading reading'
'Tenants verification of Existing Lease/ Estoppel Certificate," thus
making Weiss' failure to perform even a cursory examination unreasonable.
We cannot conclude that an experienced businessperson such as Weiss could
be so misled by this document. Accordingly, we hold that the district
court erred in finding that the Yees could not rely on the estoppel certificate
signed by Weiss. '
[Headnote 6]
The district court also concluded that Weiss was not individually liable
on the lease merely because he had signed his name a second time following
the printed word "INDIVIDUAL" The district court based its conclusion
on its finding that Weiss had been unaware of the significance of this
second signature at the time he entered into the lease. We have frequently
held that a district court's findings off act will not be disturbed unless
clearly erroneous. See Hermann Trust v. Varco-Pruden Buildings, 106 Nev.
564, 796 P.2d 590 (1990). In the instant case, the district court found
that there was insufficient evidence to indicate that Weiss intended to
be personally liable on the lease by means of this second signature. The
evidence presented supports such a finding. Therefore, we conclude that
the district court did not err in holding that Weiss was not personally
liable on the lease.
In summary, we hold that the district court erred in concluding that the
Yees constructively evicted Weiss. Weiss was not constructively evicted
and, as such, breached his lease. In light of our conclusions, we need
not address appellant's other assertions of error. We hereby reverse the
decision of the district court and remand for proceedings consistent with
this opinion.
SPRINGER, J., with whom STEFFEN, J., agrees, concurring:
I concur with the Majority Opinion reversing the judgment of
the trial court. I would, however, add a note relating to the decision-making
process employed by Judge Breen, as I believe that the error committed
in this case can be directly traced to the district judge's practice of
having the plaintiff and defendant submit written draft judgments favoring
their respective sides and then signing one or the other attorney drafts
as the court's judgment.
At oral argument we heard both counsel tell us about Judge Breen's practice
in deciding bench trials. Rather than announcing his decision to the parties
and counsel, the judge asks plaintiffs' counsel to prepare findings, conclusions
and judgments that favor plaintiffs' side and asks defendants to do the
same thing in favor of the defendant's side. Under this practice, I
Judge Breen decides cases by choosing one submitted judgment form or the
other and thereafter signing the one that he likes best as the final factfinding,
legal conclusions and judgment of the court.
It is, of course, common for judges to ask a prevailing party, after the
court's decision has been announced, to draft a proposed set of findings
and judgment. This is not what happened here. Without knowing who won,
counsel for plaintiff and defendant were ordered to submit their respective
versions of how a judgment might look should one or the other be fortunate
enough to obtain a favorable decision. The judge's ordering the losing
party to prepare a winning judgment is obviously a waste of that attorney's
time and the client's money. I have never heard of a judge's doing anything
like this. I hope we will see no more of it.
Some may think that judicial decision-making by choosing between two contradictory,
prefabricated, attorney-generated documents is acceptable judicial process;
but I do not. I find no appellate decisions which discuss this novel practice,
but I suspect that this is because no judge has been found, as a matter
of record, to employ such a practice. Nonetheless, for myself, I would
reverse the judgment in this case on this ground alone.
________
1Judge Breen's practice of accepting two opposing,
written draft decisions prepared by counsel for both plaintiff and defendant
and then simply choosing one or the other was explored by the court during
oral argument in this fashion: The Court:
Counsel, I found interesting this case because in the eighteen years that
I practiced law I had never had a judge ask both counsel to prepare findings
of fact and conclusions of law. Is this a common practice nowadays? Is
it common in Washoe County? Appellant's Counsel:
. . . . I have not encountered it before this case. . . .
There was never a decision from the bench. There was never a written
decision. There was never any information about why the judge decided
the way he did. The Court:
Why did he?
. . . . .
Counsel:
Well, it's not in the record, but I will tell you that he did express
disapproval of an opinion from this court, but he wouldn't identify what
it was. And something like, "Let's see what they do with this."
He never gave me-I still don't know, to this day, what was the deciding
factor in Judge Breen's mind. And that's very troubling because part of
what a judgment's supposed to do, I think, is to tell the people, to tell
people, like my client and myself, "No, this is not the way you do
it. You do it this way." Instead of just blindside from above, all
of a sudden this decision comes out without any reasoning, without any
recital of why, and, as a result, the parties on appeal and this court'll
have to pick through the record trying to figure out what in the "wide
world of sports" went on.
. . . . And that issue [vital points relating to releases and unpaid
rent] was never addressed by the trial court. We, don't have a clue as
to why, even if this man was constructively evicted, why doesn't he have
to pay for the time he was there?
The Court:
And your opponent didn't put anything in there [in the judgment prevailing
counsel prepared for the judge's signature] about the rent?
Counsel:
No, but he did put some things in about attorney's fees that we also
find objectionable.
The Court:
Counsel, when the judge asked both counsel to prepare findings of fact
and conclusions of law and, I assume, judgment, did he indicate how he
was going to rule?
Respondent's Counsel:
He did not. . . .
The Court:
. . . . Have you seen this practice before, Mr. McElhinney? Counsel:
I have with Judge Breen. Yes sir, I have-where there's a simultaneous
submitting; and I lost at that procedure just like I won at that procedure. The Court:
Luck of the draw. . , . Your turn this time, huh?
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