Opinion ID: 2054163
Heading Depth: 3
Heading Rank: 2

Heading: Whether Midland's Damages Should Include Common Area Maintenance (CAM) Charges, Insurance and Taxes

Text: Mercy argues that the damages caused by its breach of the estoppel certificate cannot include the other charges in addition to rent which were included in its monthly payment to FDC. Mercy's claim is based on the language of the estoppel certificate, which prohibits rent from being paid more than one month in advance. Mercy reads this language literally to mean that prepayment of other charges was not prohibited by the estoppel certificate and therefore no breach occurred from the prepayment of those amounts. The estoppel certificate provides: The undersigned [Mercy] agrees that neither you [Midland] as the holder of the mortgage ... nor any purchaser pursuant to a foreclosure proceeding shall be bound by any prepayment by us of more than one month's installment of rent or other change or modification of the Lease ... without your written consent. Midland contends that the language of the estoppel certificate does prohibit Mercy's prepayment of CAM charges, insurance and taxes. The original lease agreement provided that payment of these items would be made on a monthly (CAM charges and insurance) or yearly (real estate taxes) basis. Midland argues that Mercy breached the estoppel certificate by paying these amounts in advance because the estoppel certificate prohibits any change or modification of the Lease ... without [Midland's] written consent. Midland maintains that changing the timing of these payments constituted a modification of the lease which was specifically prohibited by the estoppel certificate. We agree with Midland that Mercy's prepayment of CAM charges, insurance and taxes constituted a modification of the lease and concomitantly a breach of the estoppel certificate. Thus, Midland is owed any damages which were caused by that breach. As established in the previous section, Midland did not sustain damages until FDC stopped paying its monthly payments under the modification agreement in September 1993. Therefore, any CAM charges, insurance and taxes which accrued during the period of September 1993 through January 1994 are damages which must be paid by Mercy. We conclude that Mercy is not entitled to a further reduction in the amount of damages it owes Midland. The amount of damages stands at $37,773.35, the total of all payments Mercy owed under the lease agreement from September 1993 through January 1994.