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by Ron Davis

Wal-Mart Stores, Inc., must pay dearly for failing to properly maintain the premises of one of its stores located in a Missouri shopping center.

The shopping center, located in Cape Girardeau, had leased space to Wal-Mart under a 20-year agreement that included a provision that required Wal-Mart to restore its premises to "an appropriate condition" at lease expiration. Specifically, the lease obligated Wal-Mart to "at its own expense, keep and maintain the interior of the leased premises...in good repair and tenantable condition during the term of the lease and make the necessary improvements to same at its own expense."

After 20 years, Wal-Mart moved from the shopping center. But the premises were not in good repair or tenantable condition. Wal-Mart had made some repairs, though not to the tile floor and the HVAC system. In addition, ballasts, light tubes, and ceiling tiles were missing.

The owner of the shopping center demanded payment for the repairs she had to make before she could relet the premises. But Wal-Mart refused to pay, arguing that the evidence did not show that it had diminished the value of the leased premises. The owner subsequently sued.

At trial, the court found that Wal-Mart had indeed failed to maintain the leased premises and awarded the shopping center owner $57,000 to pay for the cost of repairs, plus interest.

Wal-Mart appealed on grounds that the shopping center owner had failed to establish that any missing or damaged items during Wal-Mart's tenancy had resulted in a reduction in value of the property. Moreover, Wal-Mart added, the award of $57,000 was disproportionate to the value of the property.

A Missouri appellate court upheld the lower court decision, explaining, "We disagree that the shopping center owner was required to present reduction-in-value evidence.... The cost of repairs was the appropriate measure. The repairs were specifically identified, the cost was easily ascertained, and it was obvious that the damaged and missing items were insignificant in value in comparison to the value of the entire property. The missing and damaged items did not represent irreparable or permanent injury to the premises and there was no evidence that the cost of repairs was disproportionate to the value of the property." (McLane v. Wal-Mart Stores, Inc., 10 S.W.3d 602 [Mo.App. E.D. 2000])

Decision: February 2000
Published: April 2000



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