Daily Development for Tuesday, October 22, 2002

 

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of
Law
UMKC School
of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City,
Missouri
prandolph@cctr.umkc.edu

 

The Editor reports this case not so much for what the court ruled, but for the unanswered question as to what happens next. Interesting food for thought.

 

LANDLORD/TENANT; LANDLORD'S REMEDIES; HOLDOVERS:  Where a court order prohibits the landlord under a lease from executing a judgment for possession pending appeal, provided the tenant continues to pay monthly rent of $2,033, the landlord may nevertheless send a notice increasing the actual rent owed by sending to the tenant notice of a rent increase during the pendency of the appeal and later may sue the tenant to recover the increased rentals after disposition of the appeal, both without violation of the court order.

 

State ex rel. Euclid Plaza Assocs. v. Mason, No. ED 80801 (Mo. Ct. App. 2002).

 

The plaintiff purchased an office building pursuant to a tax sale.  Prior to confirmation of the sale, the prior owner of the building entered into a long-term lease with the defendant tenant, under which the defendant was required to pay monthly rent of $1,500.

 

The plaintiff and the defendant tried to negotiate a new lease, but were unsuccessful.  Landlord then sent the tenant notice that its rent would increase to $2,033.  When the defendant refused to pay this higher amount, the plaintiff sued the defendant to recover the increased rents and possession of the leased premises.  The trial court ruled in the plaintiff's favor, but prohibited the plaintiff from enforcing the judgment for possession pending appeal, so long as the tenant continued to pay monthly rent in the amount of $2,033.

 

Prior to the issuance of the appellate opinion, the plaintiff sent another notice that the monthly rent would increase, this time to $3,500. However, the defendant continued to pay only $2,033 per month, and voluntarily vacated the leased premises a few days prior to the date the appellate opinion was issued.  Soon afterward, the plaintiff again sued the defendant, this time for the defendant's failure to pay the increased rent of $3,500.  The defendant then filed a contempt action before the original trial judge, arguing that the plaintiff violated the judge's order by attempting to increase the rent and thereafter suing the defendant to recover the same.  That judge found the plaintiff in contempt and ordered the plaintiff to dismiss its second suit against the defendant for unpaid rent.  In response, the plaintiff filed a petition for a writ of prohibition to prohibit enforcement of the contempt order. The trial court granted the request, and the Court of Appeals affirmed, holding that the stay order only prohibited the plaintiff from enforcing the judgment for possession while the defendant paid $2,033 per month in rent during the pendency of the appeal; however, the stay order did not prohibit the plaintiff from increasing the rent due during that period or suing the defendant to recover that increased rent after the appellate decision was issued.

 

The appeals court, however, expressly noted that it was not deciding that the landlord in fact was entitled to any additional rent.

 

Comment 1: Note that the normal basis for concluding that a landlord is entitled to increased rent when it gives notice during a holdover is the fact that the tenant's continued occupation following such notice demonstrates acquiesence in the landlord's claim.  This apparently was the basis for the original ruling by the court that the landlord was entitled to the $2002 rent.

 

Here, however, the circumstances are different.  Now it would not necessarily be appropriate to conclude that the tenant is acquiescing in the argued for increase in rent by continuing to hold over.  The tenant has a legal right to hold over by payment of $2002 in additional rent.  The editor suspects that the landlord, in the end, will not succeed in collecting its additional claim.

 

Comment 2:   For the original ruling, that the tax sale cut off the tenant's first lease, see Euclid Plaza Associates, L.L.C. v. African American Law Firm, L.L.C., 55 S.W. 3d 446 (Mo. App. 2001)

 

 

 

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

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