Opinion
No. 78-037
Decided March 1, 1979. Rehearing denied April 5, 1979. Certiorari denied June 4, 1979.
Lessor appealed a jury verdict for her lessee in an action interpreting a lease covenant.
Affirmed in Part, Reversed in Part.
1. LANDLORD AND TENANT — "Improvements" — Defined — Meaning in Lease — Leased Building — Repairs Thereto — Responsibility of Lessee. The term, "improvements" is defined as including "everything that permanently enhances the value of premises for general uses," and the term includes, "buildings and fixtures of all kinds"; accordingly, in the context of building lease provision assigning lessee responsibility for repairs to "improvements," the use of that term could only mean the building which was the subject of the lease, including the roof; thus, under the lease, the responsibility for repairs to the roof fell upon the lessee.
2. Act of Landlord — Knowledge — Right of Forfeiture — Waiver — Acceptance of Rent — After Payment — Lessee's Repair Obligations — Waived Forfeiture Right. Any act done by a landlord with knowledge of an existing right of forfeiture which recognizes the existence of the lease is a waiver of the right to enforce the forfeiture; consequently, where lessor continued to accept rent after she paid for certain roof repairs that, under the lease, were the lessee's responsibility, she thereby waived her right to enforce forfeiture of the premises.
Appeal from the District Court of the County of Pueblo, Honorable Donald E. Abram, Judge.
William E. Kenworth, for plaintiff-appellee.
Lee N. Sternal, for defendant-appellant.
Michael Kelley brought this action against Bessie Morgan for damages caused by Morgan's termination of Kelley's building lease under a forfeiture clause in the lease. Morgan counterclaimed, asserting breach of covenant by Kelley for failure to repair the roof of the leased building and seeking $725 as restitution. At trial, the jury entered a verdict for Kelley, assessing his damages at $15,300 and found against Morgan on her counterclaim. Morgan appeals, arguing, among other things that the trial court erred in ruling the lease ambiguous, and in failing to grant her motion for a directed verdict. We affirm in part and reverse in part.
In February 1973, Kelley and a partner leased a building in Pueblo from Morgan for a three-year term. The lease was drafted by Kelley, an attorney, and contained an option to renew for an additional three years if notice to exercise the option was given 90 days before the expiration of the term. Kelley then sublet the property.
In July 1975, Kelley was told by the subtenant that the roof of the leased building needed repairs. Kelley informed Morgan of the need for repairs to the roof, stating it was her duty to repair the roof under the lease. The repairs were performed, and Morgan, relying on Kelley's statements, paid for the repairs.
In March 1976, Kelley timely notified Morgan of his intent to exercise the option to renew the lease. In June 1976, Morgan made a formal written demand for restitution of the monies previously expended by her for the roof repair to the leased building. Kelley replied by letter, stating that the roof repairs to the building were the responsibility of the landlord under the lease, thereby justifying his qualified refusal to pay. Morgan immediately served a notice to quit on Kelley and refused to honor the option to renew the lease. This suit followed.
The principal issue is whether the tenant or the landlord had the obligation to repair the roof of the building. The lease provides, in pertinent part:
"The Lessee in consideration of the leasing of said premises as aforesaid covenants . . . and . . . agrees . . .
"To keep the improvements upon said premises, including all sewer connections, plumbing, wiring, and glass, in good repair at the expense of said Lessee, and at the expiration of this lease to surrender and deliver up said premises in as good order and condition as when the same were entered upon, loss by fire, inevitable accident or ordinary wear excepted . . . ."
The trial court ruled that this provision is ambiguous as to which party was responsible for repairing the roof of the leased building. We disagree.
In order to determine if the provision of an agreement is ambiguous, the language used in the agreement must be construed in harmony with the generally accepted meaning of the words employed. Christmas v. Cooley, 158 Colo. 297, 406 P.2d 333 (1963). Reference to all parts of the agreement and the nature of the transaction which formed its subject matter must also be considered. Christmas, supra.
[1] The key word in this lease provision is "improvements." "Improvements" is defined as including "everything that permanently enhances the value of premises for general uses." The term includes, "buildings and fixtures of all kinds . . . ." 41 Am. Jur. 2d Improvements § 1. In the context of this lease, "improvements" could only mean the building which was the subject of the lease, including the roof. Thus, the responsibility of repairs to the roof under this lease falls upon the lessee, Kelley. When the lease, in its ordinary sense, shows the intention of the parties, as it does here, the lease is controlling, and the court will not look further. Tumbarello v. Byers, 37 Colo. App. 61, 543 P.2d 1278 (1975).
[2] It does not follow, however, that Morgan is entitled to a directed verdict. Morgan's services of the notice to quit upon Kelley for breach of covenant to repair the roof was improper. It is a general rule of law that any act done by a landlord with knowledge of an existing right of forfeiture, which recognizes the existence of the lease, is a waiver of the right to enforce the forfeiture. Merkowitz v. Mahoney, 121 Colo. 38, 215 P.2d 317 (1949). Here, Morgan's continued acceptance of the rent after she paid for the roof repairs constitutes waiver of her right to enforce forfeiture.
The judgment in favor of Kelley for $15,300 is affirmed. The judgment against Morgan on her counterclaim is reversed and the cause is remanded to the trial court with directions to enter judgment thereon in favor of Morgan for $725, that amount being undisputed. Interest on both judgments at the legal rate shall run from the date of entry of the original judgment in favor of Kelley.
JUDGE ENOCH and JUDGE STERNBERG concur.