On a motion for summary judgment, the question is not how a factual issue is to be decided, but whether any real issue of material fact exists.
This is a forcible entry and detainer action which resulted in a judgment of restitution of real estate to the plaintiff-lessor, who entered into a lease with a Texas corporation, which operates a chain of supermarkets. The lease refers to plaintiff-lessor as the "Landlord" and the corporation as the "Tenant," and calls for payment of fixed rent, with additional rent based on the tenant's gross receipts. Section 10.1 of the lease provides: "Tenant may not assign or transfer this Lease voluntarily or by operation of law or sublet the Leased Premises or any portion thereof without the written consent of Landlord first had and obtained." Tenant ceased all operations of its grocery store chains on February 16, 1985. Before that date, tenant asked landlord's consent for a proposed lease assignment and a subsequent sublease by assignee to the appellant, Hinky Dinky. Landlord refused. Later in February, tenant's lease assignment and sublease were executed without the landlord's consent. The landlord served a "Notice to Vacate" to the assignee and lessee but the landlord also accepted rental payments from assignee during negotiations to resolve the conflict. After a hearing on landlord's motion for summary judgment, the district court ruled that there was no genuine issue of material fact whether the landlord, as lessor, properly withheld consent to the assignment and sublease because, as a matter of law, a landlord may withhold consent for any reason. On appeal, the court reversed the judgment and remanded the cause.
Did the trial court err in ruling that there was no genuine issue of material fact and subsequently granting summary judgment in an action over assignment of a lease?
In a forcible entry and detainer action, the court held that where a commercial lease did not expressly permit a lessor to withhold consent to an assignment or subletting and contained an approval clause, a lessor was permitted to withhold consent only when a lessor had a good faith and reasonable objection to assignment of the lease or subletting, even in the absence of a lease provision that consent would not be unreasonably withheld. Because the lease at issue did not expressly permit or authorize the lessor to withhold consent, the provisions of the lease required the lessor to act in good faith and reasonably in withholding consent to an assignment or subletting. Whether the lessor acted in good faith and reasonably in withholding consent to the assignment and sublease was a question of material fact and, thus, summary judgment was not appropriate.