Opinion
No. A05-102.
Filed August 23, 2005.
Appeal from the District Court, Ramsey County, File No. C9-03-10444.
Mark W. Vyvyan, Molly O'Brien Loussaert, Frederikson Byron, P.A., (for respondent)
Ernest F. Peake, Justin P. Weinberg, Leonard, O'Brien, Spencer, Gale Sayre, Ltd., (for appellant)
Considered and decided by Peterson, Presiding Judge, Wright, Judge, and Forsberg, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
On appeal from summary judgment, appellant tenant argues that the district court erred by granting summary judgment to respondent landlord. Because the district court improperly weighed evidence and determined factual issues relating to appellant's anticipatory repudiation and constructive eviction defenses to respondent's claims for back rent, late fees, and attorney fees and costs, we reverse and remand.
FACTS
In October 2002, respondent landlord Medtox Scientific, Inc. (Medtox) sued appellant tenant Wooddale Builders, Inc. (Wooddale) for being in default on a lease for property in the New Brighton Business Center (NBBC) located at 422 West County Road D, New Brighton, Minnesota. The lease was extended numerous times, and it would eventually expire on February 29, 2004.
Article 27 of the lease provided as follows:
Landlord reserves the right, on thirty (30) days notice to Tenant, to substitute other premises within the Building for the Premises hereunder. The substituted premises shall contain substantially the same square footage as the Premises, shall contain comparable improvements, and the Minimum Rental shall not exceed the Minimum Rent specified in Article 2 hereof.
"Building" is identified in the lease as "an office and service building" at 422 West County Road D, and "Premises" is defined as 4,827 square feet of office and warehouse space, in suites 420-422 in the building.
The NBBC property was managed for Medtox by United Properties (United). In January 2002, United arranged a meeting with Wooddale representatives and informed them that Medtox would need their space in the NBBC property and that Wooddale would need to move. No specific date was given by United for the move, but witnesses for Wooddale testified in depositions that they believed June 1 or October 1, 2002, were either the move-in dates or the dates Medtox would enter the property in order to renovate and work on it.
United explained that Wooddale would be moved to a nearby property in the NBBC complex, but in a different building that a former Wooddale employee described as not "real similar" to their current property. The new building was a little larger, and it would require extensive renovations to be appropriate for Wooddale.
Wooddale president Steve Schwieters and his employees then held discussions about whether to move to the other NBBC building or to move to a totally different building and town, because most of their business was in the southern suburbs. They examined their lease with Medtox and realized that Medtox could not make them move to another building under Article 27, and they decided to move to a building they found on their own in Minnetonka. Wooddale contacted United regarding its decision to move completely out of the NBBC complex around March 2002, but United did not respond.
Medtox did not communicate at all with Wooddale, with the exception of one day in early February 2002, when a few individuals from Medtox arrived at the Wooddale space, explained that they needed to take some measurements of the space, took the measurements, and left. Wooddale eventually sent written notice about the move to Medtox because United failed to return its calls. No one turned off the power to the NBBC property, changed the locks on the doors, or did anything to inhibit the ability of Wooddale to inhabit the space after Wooddale made its announcement.
In mid-June 2002, Wooddale received a letter indicating that United received notice that Wooddale was moving out of its space but that Wooddale would remain obligated to perform under the lease for the NBBC property until expiration. Wooddale declined to pay further bills for rent (after June 2002), because it "felt that the lease had been terminated, and [Woodale was]n't responsible for it."
The parties filed cross-motions for summary judgment. The district court granted summary judgment in favor of Medtox, awarding rent owed plus interest, costs, and attorney fees.
DECISION
Standard of Review
Summary judgment motions are granted when the pleadings, depositions, answers to interrogatories, and admissions, together with any affidavits, show that there is no genuine issue of material fact and a party is entitled to judgment as a matter of law. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). Genuine issues of material fact must be shown by substantial evidence. Brookfield Trade Ctr., Inc. v. County of Ramsey, 609 N.W.2d 868, 874 (Minn. 2000). "`[O]n a summary judgment motion a court may not weigh the evidence or make factual determinations.'" State ex rel. Hatch v. Allina Health Sys., 679 N.W.2d 400, 406 (Minn.App. 2004) (quoting Fairview Hosp. Health Care Servs. v. St. Paul Fire Marine Ins. Co., 535 N.W.2d 337, 341 (Minn. 1995)). But "the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted." Fabio, 504 N.W.2d at 761. A genuine issue of material fact does not exist "when the nonmoving party presents evidence which merely creates a metaphysical doubt as to a factual issue and which is not sufficiently probative with respect to an essential element of the nonmoving party's case to permit reasonable persons to draw different conclusions." DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).
Anticipatory Repudiation
Wooddale argues that the district court improperly weighed the evidence on the summary judgment motion. The district court found that respondent was
correct in pointing out that [appellant's] memorandum fails to establish an unconditional and definite repudiation of the lease. [Appellant] characterizes the meeting as a discussion of a "proposed" relocation of [appellant] and that after the meeting, [appellant's] representatives had the "impression" or that it "appeared" that [appellant] would be required to relocate. Or that "all indications" were that [respondent] was going to breach the lease.
The district court explained that even in the light most favorable to appellant, the "vague references" cited to by appellant could not amount to anticipatory repudiation.
Appellant clarified at oral argument that Wooddale is alleging anticipatory repudiation, not anticipatory breach.
An anticipatory repudiation occurs when there is "an unconditional repudiation of a contract, either by words or acts, which is communicated to the other party prior to the time fixed by the contract for his performance." In re Haugen, 278 N.W.2d 75, 79 n. 6 (Minn. 1979). If the "jury might put a different construction upon the evidence," the issue should go to the jury. Bradford v. Doherty, 186 Minn. 18, 23, 242 N.W. 339, 341-342 (1932); see also White v. Erickson, 141 Minn. 141, 144, 169 N.W. 535, 536 (1918) (concluding that whether or not a party renounced a contract was in dispute and was a question of fact).
Wooddale argues that the district court improperly weighed the evidence by characterizing the January 16, 2002 meeting as one in which the parties discussed a "possible expansion." We agree. The deposition testimony of witnesses for Wooddale all supports the fact that the move was not just a possibility but was "going to come to fruition." There is testimony that United told a Wooddale employee emphatically that Wooddale would have to move out. The employees explained that their discussions with United left them feeling that they had no choice in the matter and must move out of their space, which would disrupt their business and require much time, energy, and money to renovate the space, to send out notifications of their move, and to print new marketing materials. Additionally, Medtox staff physically entered into the Wooddale space after the January meeting to take measurements of the space, which further shows the impending takeover of the space by Medtox.
Whether or not the words or actions by Medtox constitute an "unconditional repudiation" is a question of fact for the jury. Though Wooddale had several convenient reasons to move south and into a bigger facility, whether Wooddale actually made the choice to escape the lease and simply took "advantage of the opportunity to move," as stated by the district court, or made the decision for convenience but also because Wooddale had no other choice, is not a determination to be made by the district court on summary judgment.
Constructive Eviction
Wooddale argues that the district court improperly weighed the evidence to determine if Wooddale was constructively evicted. Wooddale claims that the threat of the unlawful move alone could constitute constructive eviction, but Medtox argues that telling a tenant to move to another building within the same complex is not of such a "grave and permanent character" to constitute constructive eviction.
Constructive eviction occurs "when the beneficial enjoyment of a [leased space] by the lessee is so interfered with by the landlord as to justify an abandonment. It does not suppose an actual ouster or dispossession by the landlord." Colonial Court Apartments, Inc. v. Kern, 282 Minn. 533, 534, 163N.W.2d 770, 771 (1968). Constructive eviction is usually a question of fact and depends on the circumstances of each case. Id. at 535, 163 N.W.2d at 772; see also Santrizos v. Public Drug Co., 143 Minn. 222, 223, 173 N.W. 563, 564 (1919) ("Usually the question whether there is a constructive eviction is one of fact with each case largely dependent upon its particular circumstances."). Acts constituting constructive eviction must be more than "mere" trespass; they must be "of a grave and permanent character done by the landlord or those acting under his authority with the intention and effect of depriving the tenant of the use occupation, and enjoyment of the demised premises. . . ." Donaldson v. Mona Motor Oil Co., 193 Minn. 283, 286, 258 N.W. 504, 506 (1935).
The district court concluded that there was "no grave or permanent interference with Wooddale's use and enjoyment of the premises" and appellant "did not choose to defend its rights under the lease, but rather decided to take advantage of the opportunity to move." We make no judgment as to whether the threat of the move to another building will be found to be of such a "grave" nature as to constitute constructive eviction, but we cannot allow the district court to weigh the facts and evidence to make such a determination on summary judgment. A fact-finder can best determine if the "emphatic," though perhaps not very detailed, statements by United, along with the measurements taken by Medtox employees of the Wooddale space, constitute a grave and permanent interference. It is not proper for the district court to resolve questions that should go to the jury. See Greenstein v. Conradi, 161 Minn. 234, 235, 201 N.W. 602, 602 (1924) (finding lower court erroneously directed the verdict for plaintiff by resolving question that should have gone to the jury).