Opinion ID: 758265
Heading Depth: 3
Heading Rank: 2

Heading: Essential Terms

Text: 25 Under New Mexico law, a valid lease agreement must contain the following essential terms: (1) the parties to the lease; (2) the lease premises; (3) a definite term, its beginning and ending fixed; and (4) the amount of rent and terms of payment. First Nat'l Bank v. Tanney, 51 N.M. 60, 178 P.2d 581, 582 (N.M.1947). The district court found that the parties agreed to the following terms of the sublease: (1) Manuel Chavez and Ricardo Chaves signed an agreement; (2) the agreement involved a sublease; (3) the agreement covered Chavez Properties, Southwest Realty, and MRC; (4) Southwest Realty and Chavez Properties would pay MRC $25,000 a month in rent; (5) the property covered by the sublease was the parking lot located at the corner of Yale Boulevard and Gibson Street; and (6) the sublease covered the entire five-year renewable term of the Ratner Lease. 26 The defendants challenge the validity of the agreement to sublease on three grounds under general contract law. First, the defendants argue that because no evidence was presented that the original memorandum mentioned either Lorentzen, Southwest Realty, or Park & Shuttle specifically by name, the agreement to sublease lacked an essential term regarding the identity of the parties and cannot be enforced by Southwest Realty or Park & Shuttle against MRC. However, the defendants do not contest the district court's May 10, 1996, order making additional findings of fact where the district court found that Park & Shuttle was a third party beneficiary of the contract. Under New Mexico law, third party beneficiaries to a contract can sue to recover damages for breach of the contract. See Bank of New Mexico v. Rice, 78 N.M. 170, 429 P.2d 368, 373 (N.M.1967); Hoge v. Farmers Market & Supply Co., 61 N.M. 138, 296 P.2d 476, 479 (N.M.1956). In addition, a third party beneficiary need not be named in a contract in order to sue under the contract. See Hamill v. Maryland Cas. Co., 209 F.2d 338, 340 (10th Cir.1954) (New Mexico ... recognizes the now well established rule to the effect that a third party may sue and recover upon a valid contract in which he has a beneficial interest, whether designated therein as a beneficiary or not.). 11 27 Second, the defendants argue that because the district court did not find that the original memorandum included a specific commencement date, the sublease is unenforceable under New Mexico law. See Greer v. Stanolind Oil & Gas Co., 200 F.2d 920, 922 (10th Cir.1952) (contracts should have a definite ascertainable date of commencement and termination to be enforceable, but court can resort to extraneous facts to determine commencement date if the contract itself creates a patent ambiguity). However, the district court found that the sublease was to cover the entire five-year duration of the Ratner Lease. In addition, in its May 10, 1996 ruling on the issue of damages, the district court found that the sublease would commence on October 1, 1992, and expire five years later, tracking the exact commencement and termination dates of the renewable Ratner Lease. 28 Third, the defendants contend that the district court did not find that Ratner actually approved the sublease as required by the Ratner Lease, and thus the sublease was unenforceable when signed. The Ratner Lease states that the Lessee shall not ... sublet the leased premises, in whole or in part, without the prior consent of Lessor, which consent shall not be unreasonably withheld. The district court found that Lorentzen spoke with Marvin Ratner and that Mr. Ratner indicated that he would approve the sublease. 12 The defendants attempt to make much out of the district court's phrasing of its finding by arguing that because the district court only found that Mr. Ratner indicated that he would approve the sublease and not that he did approve the sublease, the agreement to sublease was unenforceable. The district court clearly understood that Ratner's approval was required to make the sublease effective. Lorentzen testified that he requested and received approval of the sublease from Ratner, and the district court found Lorentzen's testimony on this point credible. The sublease prepared by Lorentzen's counsel specifically states, It is further understood that the Lessor, Marvin L. Ratner, Trustee, of the Lease ... will approve this Sublease. In addition, the Ratner Lease indicates that Ratner's approval would not be withheld unreasonably. Given Lorentzen's testimony, there is no reason to believe that even if Ratner had not already approved the sublease, that he not would do so if asked. Technically, because the original memorandum constituted an agreement to sublease, and not the actual sublease itself, Ratner's approval was not required until the actual sublease was to be signed. MRC renounced the sublease prior to its effective term, and consequently Ratner's approval was not sought after MRC's renunciation. Therefore, the district court's finding is sufficient to support a conclusion that the condition precedent of Ratner's approval was met.