The Law

Landlord Pays the Bill by Michael Blahy What is written on paper matters, regardless of oral agreements, but statute of limitations can also effect outcomes at trial. Reasonable offers of judgement may be worth making and taking. Roger Hemphill (Hemphill) and Donald Davis (Davis) leased space in a commercial building to operate an automotive repair business in November 2008. The 10 year lease with the building owner, David Griffith (Griffith) included clauses requiring Griffith to “maintain a policy of fire and other casualty insurance upon the premises” and to “maintain the premises . . . in reasonable good order and condition.” At the end of the lease, Hemphill and Davis had the option, to hold over under specified terms or to purchase the property for fair market value. Griffith refused to pay for the property insurance, so Hemphill and Davis purchased and paid for insurance on their own. In 2010 the roof started leaking damaging a tire balancer. Griffith again refused to make repairs to the roof and replace the balancer. Hemphill and Davis had to mitigate the issues on their own. In 2016, due to lack of maintenance, water accumulated on the roof which eventually leaked in multiple places. Hemphill and Davis met with Griffith to ask him to repair the damage. Again, Griffith refused and threatened “eviction, revocation of their option to purchase, and a lawsuit. ” Hemphill and Davis made the repairs on their own. In November of 2018, Hemphill and Davis served notice that they would like to purchase the property. They didn’t vacate the property after the lease expiry date. In January 2019, Griffith started a forcible entry and detainer action in district court against his squatters claiming $25,000 in damages. In February of 2019, Hemphill and Davis replied with a counter claim for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and specific performance, seeking $100,000 in damages. Superior court took over the case. In April of 2019, Hemphill and Davis moved from the property and served Griffith with an offer of judgment to terminate all claims with a judgement of $20,000 in their favour. Griffith in return added the three additional claims to his action. After a two day bench trial, the superior court found that Griffith was responsible to pay for property insurance and required to maintain the property. Due to the statute of limitations applicable to contract actions, damages were limited to three years from the date of filing the counterclaim. Hemphill and Davis were awarded $1,173 for 2016 insurance paid, $243 for 2017 insurance paid, $6,500 in costs to repair an exterior wall and $11,450 to paint and perform miscellaneous repairs associated with the 2016 roof failure. The court awarded only Hemphill and Davis $19,330 in damages. Since the total damages awarded were within five percent of the April 2019 $20,000 judgement offer, the superior court ordered an additional judgement for $59,604.75 in attorney’s fees to Hemphill and Davis. Griffith appealed, claiming that Hemphill and Davis’s statute of limitations arose with the 2010 claim, when he first denied to make repairs due to a roof leakage. The Alaska Supreme Court found: The Superior Court Did Not Err By Ruling That Hemphill And Davis’s Breach Of Contract Claim Was Timely. The Superior Court Did Not Clearly Err By Awarding Hemphill And Davis $19,330 In Damages For Breach Of Contract. The Superior Court Did Not Err By Awarding Hemphill And Davis Attorney’s Fees Under Civil Rule 68. And affirmed the judgment of the superior court. (David Griffith v. Roger Hemphill and Donald Davis (Supreme Court of the State of Alaska, Docket No. S-18041)) Decision: December 2022 Published: December 2022 Feature Articles If you have an opinion on the retailing or retail real estate industries, take this opportunity to share your thoughts. Articles should run between 400 and 800 words. Topics can, be general in nature, consumer observation or specific to retail concepts or practices. Articles will be posted for at least one week and will then be placed in the Editorial Archives. All articles submitted will be read and considered but we cannot guarantee publication. Each published article will carry the submitters byline (if desired) and is a free service to our community. Article ideas and suggestions are also always welcomed. Contact PVS@PlainVanillaShell.com