Richard Barton Enters. v. Tsern - 928 P.2d 368 (Utah Sup.Ct. 1996)

Rule:

The covenant to pay rent under a commercial lease is dependent on the lessor's compliance with those covenants necessary to provide the lessee with the benefits that were the essence of the bargain as reflected in the lease. This relieves a lessee of the obligation to abandon the premises, as is necessary under the fiction of a constructive eviction. By making the lessee's covenant to pay rent dependent on the lessor's performance of essential covenants, the legal analysis can focus on the essential elements and purposes of the bargain between the lessor and the lessee. By employing contract principles, a court's analysis of a dispute between a lessor and a lessee should provide a more fair, realistic, and forthright analysis of whether a lessee may abate rent. The result reached on such an analysis should better comport with modern leasing practices and expectations than the result under an analysis based on the principle of independent covenants as modified by the doctrine of constructive eviction.

Facts:

Plaintiff tenant Richard Barton rented a commercial building that required the defendant lessor John Tsern to repair a freight elevator to good working order. Defendant repaired the elevator so that it would move up and down but refused to make repairs that made the elevator operate reliably and safely. A city inspector subsequently shut the elevator down. The parties discussed rent abatement but never agreed upon an amount. Thus, plaintiff filed an action for a declaratory judgment to establish the defendant’s duty to repair the elevator. The district court entered judgment in favor of the plaintiff upon finding that the parties had agreed to abatement and that the elevator had not been repaired under the terms of the lease. On appeal, defendant claimed that the trial court erred in awarding the rent abatement and that the trial court's finding that the elevator was not repaired under the terms of the lease was erroneous.

Issue:

Did the district court err in awarding plaintiff a rent abatement under a commercial lease and the cost of repairing an elevator?

Answer:

No.

Conclusion:

The court affirmed the trial court's judgment in favor of the plaintiff lessee. The covenant to pay rent under a commercial lease is dependent on the lessor's compliance with those covenants necessary to provide the lessee with the benefits that were the essence of the bargain as reflected in the lease. In this case, the court held that the plaintiff’s covenant to pay rent was dependent upon the defendant’s covenant to restore an elevator to good working condition. The court ruled that the district court's finding that the defendant failed to repair the elevator pursuant to the terms of the lease was not an abuse of discretion.