No. 83-168
I N THE SUPREJ!!lE COURT O TEE STATE OF M N A A
F OTN
1983
GALLATIN VALLEY MEDICAL DENTAL CENTER, I N C . ,
a Mont. C o r p . ,
P l a i n t i f f and R e s p o n d e n t ,
-vs-
MICHAEL J . LEMLEY,
D e f e n d a n t and A p p e l l a n t .
APPEAL FROM: District Court of t h e Eighteenth J u d i c i a l D i s t r i c t ,
I n a n d f o r t h e County o f G a l l a t i n ,
The H o n o r a b l e J o s e p h E . Gary, J u d g e p r e s i d i n g .
COUNSEL O RECORD:
F
For Appellant:
J o s e p h E. Mudd, B r i d g e r , Montana
F o r Res2ondent:
Douglas R . D r y s d a l e , Bozeman, Plontana
Submitted on B r i e f s : July 21, 1983
Decided: October 6 , 1983
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Clerk
Mr. Justice L.C. Gulbrandson delivered the Opinion of the
Court.
Defendant, Michael J. Lemley, appeals from a judgment
of the Eighteenth Judicial District Court awarding
plaintiff, Gallatin Valley Medical-Dental Center, Inc.
$4,340.25 in rent. We affirm.
The parties entered into a five year lease for a space
in a building known as Gallatin Valley Medical-Dental Center
in Bozeman, Montana. Appellant agreed to pay a total of
$11,571 during the first two years of the lease in equal
installments of $482.25 per month commencing on July 1,
1979. By the terms of the lease, the premises was to be
used as a pharmacy and could not be sublet without the
written consent of the respondent.
In August, 1979, without any notice to respondent,
appellant sold his pharmacy business to Donald A. and Hazel
Angle. The Angles added their signatures to the original
lease and paid the respondent rent until September 1, 1980
when they vacated and abandoned the premises.
On September 24, 1980 the respondent wrote a letter to
appellant advising him that he was in default and the lease
was terminated, but that all rights and remedies contained
in the lease were reserved.
The respondent eventually relet the premises on July
1, 1981 for $300 per month.
Respondent commenced this action on June 12, 1981
claiming appellant owed him $4,340.25 in lost rent. The
complaint alleged that appellant had violated the terms of
the lease by not paying $482.25 per month from October 1,
1980 to the date of the complaint. In his answer, appellant
admitted owing the respondent $4,340..25 but asserted he had
been released from his obligations under the lease because
respondent had terminated the lease and accepted rent from
the Angles.
The District Court held that respondent's letter of
September 24, 1980 did not terminate appellant's liability
and appellant owed respondent $4,340.25 pursuant to the
terms of the lease.
Appellant now contends the District Court erred in
awarding respondent the lost rent. Specifically, appellant
asserts that respondent's letter of September 24, 1980, read
in conjunction with the lease, indicates that any liability
for rent was terminated by the language of the letter.
Moreover, appellant asserts that the lease must be construed
against the respondent because Section 28-3-206, MCA
provides that an ambiguous contract must be interpreted most
strongly against the party who caused the uncertainty to
exsist.
We affirm the judgment of the District Court.
Initially, we note that the record does not indicate
that respondent prepared the lease. Thus, the agreement
cannot be construed against respondent pursuant to Section
28-3-206, MCA.
In this dispute, the applicable portion of the lease
is section 7, which, in pertinent part, provides:
"If the leased property shall be
deserted or vacated,. ..
"or there shall be a default in the
payment of any rent or any part thereof,
for more than fifteen (15) days ...
" after written notice of such default by
the Landlord, Tenant's rights in this
lease ...
" shall thereupon terminate and end, and
the Landlord shall have the right to
enter or reposses the leased property ..
"Landlord may likewise ...
"and in addition to any other remedies
which Landlord may have upon default, let
and re-let said premises in whole or in
part ...
"and Tenant shall be liable unto Landlord
for any deficiency between the remaining
upaid rental and the rental so procured
by the Landlord for the period of said
letting or re-letting and shall further
be liable for costs of re-letting ...
"and Landlord may institute action for
the whole of such deficiency immediately
upon effecting a letting or re-letting
and shall not thereafter be precluded
from further like action in the event
that such letting or re-letting shall not
embrace the whole unexpired portion of
the term hereof. ..
"If the Landlord shall give the notice of
termination as herein provided, then at
the expiration of such period, this Lease
shall terminate as completely as that
were the date herein definitely fixed for
the expiration of the term of this lease,
and Tenant shall then surrender the
leased property to Landlord. ..
"the notice hereinbefore provided is only
for the purpose of creating conditional
limitation hereunder pursuant to which
this lease shall terminate."
The appellant argues that respondent's letter of
September 24, 1980 triggered that portion of section 7 which
provides: "If the Landlord shall give the notice of
termination as herein provided, then at the expiration of
such period, this Lease shall terminate as completely as
that were the date herein definitely fixed for the
expiration of the terms of this lease. . ." In making this
argument, appellant points to the fifth paragraph of the
letter of September 24, 1980 which states, "Therefore, the
Landlord does elect without f u r t h e r n o t i c e t o t e r m i n a t e t h e
lease bearing t h e d a t e of J u n e 22, 1979, and r e f e r r e d to
above, reserving to itself a l l other rights and remedies
c o n t a i n e d i n t h e s a i d lease i n t h e e v e n t of d e f a u l t . " Thus,
a p p e l l a n t a s s e r t s t h e o b l i g a t i o n t o p a y r e n t was t e r m i n a t e d
by t h e l e t t e r .
The letter of September 24, 1980, taken in its
entirety, d i d n o t end a p p e l l a n t ' s o b l i g a t i o n t o pay r e n t .
The r e s p o n d e n t ' s l e t t e r did terminate the lease s o f a r a s
a p p e l l a n t ' s r i g h t s were concerned, b u t t h e remedial o p t i o n s
of the l e a s e were reserved. The portion of the letter
appellant relies upon clearly states that although
appellant's l e a s e was b e i n g terminated, r e s p o n d e n t was
" r e s e r v i n g t o i t s e l f a l l o t h e r r i g h t s and remedies c o n t a i n e d
i n the said lease i n the event of default." T h i s is a c l e a r
i n d i c a t i o n t h a t p r o v i s i o n s of t h e l e a s e , i n c l u d i n g t h e r i g h t
t o c o l l e c t l o s t r e n t , were being r e s e r v e d . In addition, it
s h o u l d have been e v i d e n t t o t h e a p p e l l a n t t h a t t h e l e t t e r of
September 24, 1980 was not solely a termination of
a p p e l l a n t ' s r i g h t s under t h e l e a s e . The t h i r d p a r a g r a p h o f
the letter states: "This is intended as the specific
fifteen-day n o t i c e o f d e f a u l t a n d non-payment called for in
your lease" (emphasis added). Thus, the language of the
letter expressly indicated that because appellant was in
d e f a u l t , r e s p o n d e n t was t e r m i n a t i n g h i s r i g h t s a n d r e s e r v i n g
remedies under t h e l e a s e .
S e c t i o n 7 o f t h e lease p r o v i d e s t h a t i n t h e e v e n t o f
default ". . .Tenant's r i g h t s i n t h i s l e a s e ( i f t h e Landlord
so elects and such election is reserved). . . shall
t h e r e u p o n t e r m i n a t e a n d e n d , and t h e L a n d l o r d s h a l l h a v e t h e
right to enter or repossess the leased property. .. " The
lease further provides, "Landlord may. . . at Landlord's
option, and in addition to any other remedies which Landlord
may have upon default, let and relet said premises. . . and
the Tenant shall be liable unto Landlord for any deficiency
between the remaining unpaid rentals and the rentals so
procured. .. "
Thus, the respondent had the right to terminate
appellant's rights in the lease, in order to let or relet,
and still hold the appellant liable for rent.
Finally, appellant argues that respondent's remedies
were exclusive, i.e., respondent could not terminate
appellant's rights in the lease and relet the premises.
This assertion is not what appellant agreed to when he
entered into the lease. As previously discussed, the
language of the lease states that in the event of default
appellant's rights were terminated and respondent could
repossess and relet the premises.
In sum, we find no reversible error and therefore
af firm.
We concur: