Title: Estwin Corp. v. Prescription Ctr. Pharmacy

State: nevada

Issuer: Nevada Supreme Court

Document:

563 P.2d 78 (1977) ESTWIN CORPORATION, Appellant, v. PRESCRIPTION CENTER PHARMACY, INC., doing business as Landmark Pharmacy, and Donald Iglinski, Respondents. No. 8618. Supreme Court of Nevada. April 25, 1977. *79 Dickerson, Miles & Pico, Las Vegas, for appellant. Scotty Gladstone, Las Vegas, for respondents. PER CURIAM: Estwin Corporation leased a store in a Las Vegas shopping center to Prescription Center Pharmacy, Inc., in August of 1972. In 1974 a dispute arose concerning the proper interpretation of Section 3.06 of the written lease agreement which provides for an upward adjustment of the fixed minimum rent calculated annually with reference to the percentage increase of the United States Consumer Price Index (CPI). Estwin Corporation filed an action for declaratory relief and appeals from the adoption by the lower court of lessee's interpretation of the clause in question. The rent payable under the ten-year lease prepared by Estwin Corporation was calculated by taking the fixed minimum rent, which automatically increased after four years; adding to that any amount by which a percentage of the gross annual sales exceeded the minimum; and additionally, annually adjusting the fixed minimum rental upward by the percentage which the CPI had moved since the last adjustment. The different interpretations of the last clause by lessor and lessee resulted in this action. That section of the lease provides: Appellant-lessor contends that the proper method of calculating the increase is to divide the current consumer price index by the base 125.0, multiply that by the fixed minimum rent, and add the resulting figure to the last adjusted rent. Respondent-lessee claims the proper method is to subtract the last applicable consumer price index from the current index figure, divide the difference by the last applicable index figure, apply that percentage to the fixed minimum rent, and add the resulting figure to the last adjusted rent. Appellant's construction emphasizes the last phrase of § 3.06, while respondent's follows from the language "by the percent which said price index has moved since the last adjustment in rent." The lower court found the language of the provision ambiguous and therefore construed it against the lessor-draftsman. The court declared the proper computation as follows: We have reviewed the entire record and conclude that the lower court's construction of the disputed provision is reasonable with a view to fair dealing between the parties. Gallagher v. Holland, 20 Nev. 164, 18 P. 834 (1888). Affirmed.