Opinion ID: 2124452
Heading Depth: 1
Heading Rank: 1

Heading: Action for rent loss.

Text: This action was brought by Marshall and Samuella Rotter to recover rent they claim was lost due to the taking of their two buildings by condemnation. The warehouse on Fourth Street was taken on October 28, 1966. The store building on Third Street was taken on June 16, 1967. National Hardware's lease with the Rotters for the store building began in 1961, and was renewed for five years on December 31, 1965. (The rent was $800 per month.) By mutual agreement of the parties, no rent was paid by National Hardware to the Rotters from January 1, 1967, until the store was taken on June 16, 1967. The trial court dismissed the complaint on the ground that the Rotters voluntarily released National Hardware from its rental obligation under the lease, and, therefore, the rent loss did not qualify as a compensable item of damages under sec. 32.19 (4), Stats. 1965. The applicable statute provides that, in eminent domain proceedings, net rental losses resulting from vacancies during the year preceding the taking of the property shall be compensable, but only if ... such rental loss was caused by the proposed public land acquisition. [1] Additionally, the statutory requirement is that, for moving expenses to be recoverable, there must be an ... existing unexpired written lease, the full term of which is at least 3 years. [2] The trial court's holding was that any rent loss by the Rotters was not caused by the public land acquisition, but was caused by the Rotters' voluntary releasing National Hardware from the terms of the written lease between the parties. Additionally, the trial court found that there ... continued to be at least a minimal occupancy of the Third Street property by the corporation from January 1, 1967, up to the approximate date of the taking by the Commission in June, 1967. On this point, the Rotters responded by asking, Can the claim of the Rotters be denied because they permitted their corporation a minimal use of the building for storage of some minor and miscellaneous items? [3] We underline the reference to their corporation to make the point that, for the purpose of determining rent loss, National Hardware is a corporate entity, separate and distinct from the Rotters. In a condemnation action, involving properties owned by a husband and wife and property owned by their family-controlled corporation, our court rejected the unity-of-use approach, saying: [T]hose who created the corporation in order to enjoy advantages flowing from its existence as a separate entity are asking that such existence be disregarded where it works a disadvantage to them. We do not consider it good policy to do so. [4] For all purposes here, the Rotters and National Hardware are separate legal entities and must be treated as such. Here, for their own reasons, the Rotters chose to release National Hardware from the obligation to pay rent under the written lease. The result is the same as if the lease had been entered with and release given to Safe-way Stores or Sears. The same release of obligations under the lease would be present. Any rent loss sustained by the Rotters under their lease with National Hardware was, as the trial court found, solely attributable to the Rotters having released National Hardware from its obligation to pay rent under the written agreement. Such being the situation, the rent loss sustained was not caused by the acquisition of the store building by the county, but by the release of rental obligations agreed to by the Rotters.