Opinion ID: 2611465
Heading Depth: 1
Heading Rank: 5

Heading: Waiver of performance

Text: Having concluded that the original lease became enforceable at some time after Merrill acquired title to the property in question, there remains the issue of whether Merrill subsequently waived Respondents' performance under the lease. The district court found that Merrill waived performance by [Respondents] when he allowed [them] to continue seeking county approval without paying rent. Issues of whether a waiver has been implied by conduct are questions for the finder of fact. Parkinson v. Parkinson, 106 Nev. 481, 796 P.2d 229 (1990). Because the question of whether a waiver occurred in this case turns on the legal implications of Merrill's written rent concessions rather than on whether such concessions were made or on the implications of Merrill's conduct, the determination of whether Merrill thereby waived Respondents' performance is a question of law, and therefore subject to de novo review. See SIIS v. United Exposition Services Co., 109 Nev. 28, 30, 846 P.2d 294, 295 (1993) (summarizing authority for the conclusion that matters of law are appropriate for de novo review). It is clear that, absent a waiver, Beller's March 25, 1994 letter to Torpy, attempting to cancel the lease pursuant to the contingency clause, was legally ineffective because the clause specified that cancellation based on inability to obtain an adult use permit would not be allowed after February 1, 1994. Although Respondents argue that the parties mutually understood that the lease could not stand unless Respondents were able to obtain an adult use permit, the clear language of the contingency clause shifted the risk entirely to Respondents after February 1, 1994, holding them to the lease regardless of whether they were able to obtain a permit. Furthermore, the merger clause provides that [n]o prior agreement or understanding pertaining to any such matter shall be effective, and that the lease may be modified in writing only. The district court concluded that Merrill waived Respondents' performance under the lease on the basis of Merrill's rent concessions. Respondents argue that Merrill's rent concessions waived the rent as well as the time limitations as a part of continuing negotiation. In order for Merrill's concessions to constitute a waiver, they must have involved the intentional relinquishment of a known right. Mahban v. MGM Grand Hotels, 100 Nev. 593, 596, 691 P.2d 421, 423 (1984). Hence, Merrill must have intentionally relinquished his right to collect future rents or to hold Respondents to the February 1, 1994, expiration date of the contingency clause in order to effect a waiver. The record and pleadings reflect only two instances in which Merrill allowed rent concessions varying from the otherwise applicable rent schedule. The first such instance is a clause in the original lease itself, providing, in pertinent part, that Respondents will receive the month of January 1994 and the first month all improvements are completed and approved (totaling two months) rent free. This provision does not have the legal effect of relinquishing the general right to collection of future rents under the lease, either intentionally or unintentionally. The provision is an element of the lease itself, and simply provides a small exception to the otherwise applicable rent schedule. If the clause effected a waiver, it waived only the right to collection of rent during the month of January 1994 and the first month all improvements are completed and approved. The obvious limitation of the rent concession is bolstered by the waiver clause in the lease, which provides that [n]o waivers by [Merrill] of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach of [Respondents] of the same or any other provision. Merrill's second rent concession was his offer of free rent for the period of February 1, 1994, to February 15, 1994, in exchange for receipt of a construction schedule by March 1, 1994, and a set of plans for the improvements by March 30, 1994, as well as releasing Merrill from any claims relating to his ownership of the property during the lease period. The language of Merrill's offer is unequivocal, and clearly does not relinquish his right to collection of rent for any period other than February 1, 1994, to February 15, 1994. In addition to the obvious and express limitations on Merrill's rent concessions, Respondents offer no evidence whatsoever that Merrill relinquished his right to enforce the February 1, 1994 expiration date of the contingency clause. If, as Respondents claim, Merrill's lack of ownership prevented them from obtaining an adult use permit before that date, they were free to rescind the lease at that point, or to offer to forego recision if Merrill would agree to extend the expiration date with a written modification agreement as required by the merger clause. Respondents failed to take this course of action, and offer no evidence that Merrill intended to relinquish his right to enforce the lease without the expired contingency clause. Accordingly, we conclude that the district court erred in holding that Merrill waived performance by [Respondents] when he allowed [them] to continue seeking county approval without paying rent. After reviewing the various arguments raised on appeal and concluding that the lease at issue is enforceable against Respondents for the foregoing reasons, we reverse the judgment of the district court on both the claim and the counterclaim and remand this case to the district court for further proceedings consistent with this opinion.