Opinion ID: 1096634
Heading Depth: 1
Heading Rank: 3

Heading: Forfeiture of Lease

Text: ¶ 5. Farm Services argues that the trial court's decision to forfeit the lease on the basis that Farm Services dismantled a building was erroneous. Farm Services concedes that it did dismantle an antiquated building, unusable silos, and disposed of rusted farm equipment. Farm Services advised that fertilizer residue caused the buildings to be in danger of explosion. Farm Services also contends that the court disregarded provisions of the lease that gave it the right to alter the nature of the fertilizer and feed business and to remove any machinery or equipment that was obsolete or uneconomical to maintain. Farm Services suggests that members of the Board and the Board's attorney were aware of the dismantling of the buildings. Farm Services also claims that one supervisor participated in helping to remove dismantled portions of the building. Farm Services advances that it was error for the court to state that although the County had notice of the dismantling, waiver did not apply to the Board. ¶ 6. The construction of a contract is a question of law to be reviewed de novo. Gulfside Casino P'ship v. Miss. State Port Auth. at Gulfport, 757 So.2d 250, 257 (Miss.2000). A contractual clause should be objectively construed. See id. [T]he first rule of contract interpretation is to give effect to the intent of the parties, however, the words utilized are the best resources for ascertaining intent and assigning meaning with fairness and accuracy. Simmons v. Bank of Miss. 593 So.2d 40, 42 (Miss.1992). [M]ere disagreement about the meaning of a contract clause does not make it ambiguous as a matter of law. Gulfside Casino P'ship, 757 So.2d at 257 (quoting Simmons, 593 So.2d at 42-43). ¶ 7. Farm Services' assertion that the trial judge forfeited the lease because Farm Services dismantled buildings on the property is partly correct. The court did find that Farm Services breached provisions of the lease by dismantling structures and improvements built with County bond money, however, this finding was ancillary. The judgment clearly states that the trial judge declared that (1) the lease is terminated and canceled for Farm Service, Inc.'s default due to its failure to be in operation for more than one year and/or failure to provide employment to residents and to decree immediately possession of the property to the County; and (2) that the lease is terminated for failure of lessee to rectify breaches within 60 days of the Board's order on December 12, 1999, or the attempted registered notice to Farm Services on December 28, 1999 or within 60 days of filing of this action. Furthermore, the Board stated in its Order to Terminate the Farm Services Lease that the lease has been broken by Farm Services, Inc. for failure to be in operation for more than one year as well as having failed to pay the annual rental for several years.... ¶ 8. The lease provides in pertinent part: 3. Employment: ... Mill will exercise due diligence to maintain and operate a manufacturing, processing, warehousing, or other similar type industry in said building expansion project, and to provide steady employment in such operations provided that this agreement is predicated on the continued peaceful operation of the building enterprise of the premises described in this contract and the continued peaceful relationship by and between County, the Mill and all Mill employees. County and the Mill expressly agree and understand that Mill shall not be required to do any of the above things during any period of time or times when any of the above things are interrupted or when Mill may reasonably anticipate that any of the above things will be interrupted by or as a result of disputes, activities of any person or persons (whether employed by Mill or not), events or circumstances beyond the control of Mill or its management; it is further agreed and understood that Mill shall not be held responsible for factors beyond its control not for interruptions to employment caused by civic commotion, riot, labor disputes and acts of government. It is further agreed that Mill shall not be deemed guilty or chargeable with any breach of covenant or agreement contained in this paragraph unless and until Mill has failed for a continuous period of one year to comply with the provisions hereof, and that in the event of such failure, County may cancel this lease. ¶ 9. Farm Services agreed in its lease assignment from Riverside Chemical Company, assignor, dated May 26, 1978, to assume all of Assignor's title to and interest in the Lease including all rights, privileges and obligations arising thereunder.... In doing so, Farm Services also agreed to the Employment provision. The record reveals that Farm Services ceased its operations and has not employed residents since August 29, 1997. John McReynolds explained that operations ceased because of the embargoes on Russia due to conflicts in Afghanistan. He noted that the Russians lost faith in the United States and began to buy soybeans from other sources and this caused the feed business to go under. ¶ 10. The evidence offered that the cessation of operation was beyond Farm Services' control was not sufficient to shelter Farm Services under the exception that it is not to be held responsible for factors beyond its control nor for interruptions to employment caused by civic commotion, riot, labor disputes and acts of government. Farm Services did breach the lease by failing to operate its business for more than a year and by failing to provide employment to residents. Hence, we find that the trial court committed no error in forfeiting the lease.