Court Opinion

ID: 2747257
Source: CourtListenerOpinion
Date Created: 2014-10-31 14:05:15.839855+00
Date Added: 2024-06-11T10:15:15.332878
License: Public Domain

IN THE SUPREME COURT OF IOWA
                              No. 13–0496

                          Filed October 31, 2014

ALTA VISTA PROPERTIES, LLC,

      Appellant,

vs.

MAUER VISION CENTER, PC,

      Appellee.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Black Hawk County,

David F. Staudt, Judge.

      A commercial landlord appeals a summary judgment ruling

interpreting the parties’ lease as prohibiting the landlord from showing

the property to prospective purchasers until ninety days before the end

of the lease term.   DECISION OF COURT OF APPEALS VACATED;

DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED

WITH INSTRUCTIONS.

      Corey R. Lorenzen and Kate B. Mitchell, Beecher, Field, Walker,

Morris, Hoffman & Johnson, P.C., Waterloo, for appellant.

      Diane Kutzko, Donald L. Johnson, and Scott M. Wadding,

Shuttleworth & Ingersoll, PLC, Cedar Rapids, for appellee.
                                    2

MANSFIELD, Justice.

      This case requires us to interpret a commercial lease. Our task is

to determine whether the landlord is authorized to enter the leased

property to show it to potential buyers. The tenant argues that access is

not permitted until ninety days before the end of the lease term. The

tenant relies on a lease provision entitled “SIGNS,” which provides that

the landlord may erect “For Rent” or “For Sale” signs during the last

ninety days of the tenancy and that the tenant must permit prospective

tenants or buyers to enter during that time. The tenant maintains this is

the only time the landlord can access the property to show it to potential

buyers.

      The landlord disagrees.   The landlord relies on lease provisions

that make the tenant’s use of the premises “non-exclusive” and give the

landlord the right to sell the property, mortgage it, or assign the lease

interest at any time during the lease term. The landlord contends that

the right to sell the property encompasses the right to show the property

during the lease term at reasonable times to prospective buyers.

      Upon our review, we agree with the landlord’s interpretation of the

lease. Therefore, we vacate the decision of the court of appeals, reverse

the judgment of the district court, and remand with instructions to the

district court to enter summary judgment in favor of the landlord.

      I. Background Facts and Proceedings.

      On October 23, 2003, Mauer Vision Center, PC as tenant and I4NI,

L.L.C. as landlord entered into a written lease for a building located at

124 Second Street N.E. in Waverly, together with the use of the

improvements thereon.     The lease had a term of fifteen and one-half

years. The lease included the following provisions:
                               3
12. SIGNS.

A. Tenant shall have the right and privilege of attaching,
affixing, painting or exhibiting signs on the Leased Premises,
provided only:
       (1)   Any and all signs shall comply with the
             ordinances of the [City of Waverly] and the laws
             of the State of Iowa;

       (2)   Such signs shall not change the structure of the
             building; and

       (3)   Such signs, if and when taken down, shall not
             damage the building.

B. Landlord, during the last ninety (90) days of this Lease,
or any extension, shall have the right to maintain in the
windows or on the building or on the premises a “For Rent”
or “For Sale” sign, and Tenant will permit, at such time,
prospective tenants or buyers to enter and examine the
premises.

13. ASSIGNMENT AND SUBLETTING. Landlord may assign
all or any part of its rights under this Lease to any grantee or
mortgagee. . . .

....

18. COVENANT FOR QUIET ENJOYMENT.                  Landlord
covenants that Landlord’s estate in said Premises is in fee
simple; and that the Tenant on paying the rent herein
reserved and performing all the agreements by the Tenant to
be performed as provided in this Lease, shall and may
peaceably have, hold and enjoy, the non-exclusive use of the
Leased Premises for the term of this Lease.

19. RIGHT TO MORTGAGE. Landlord shall have the right to
mortgage all of its right, title, and interest in said Premises
at any time without notice, subject to this Lease.

....

24. CHANGES TO BE IN WRITING. . . . This Lease contains
the whole agreement of the parties.

....

27. RIGHT OF FIRST REFUSAL. In the event Landlord
receives an offer to purchase the building that includes the
Leased Premises during the term of this Lease or any
renewal term which Landlord is willing to accept, Landlord
shall first give notice of such offer to Tenant. Tenant shall
                                            4
      have the right to elect to purchase the building that includes
      the Leased Premises on the same terms and conditions
      contained in such offer by giving written notice of its
      intention to exercise its right within five (5) days after receipt
      of written notice of such offer from Landlord. Tenant’s
      failure to give notice of its intention to exercise its right of
      first refusal within the five (5) day period shall cause this
      right of first refusal to lapse and Landlord shall then have
      the right to proceed to sell the building to the party which
      submitted the offer to purchase the same.

      The lease also provided in paragraphs 5 and 7 respectively that the

landlord had a right to regain possession on termination of the lease and,

during the lease term, the tenant and not the landlord was responsible
for maintenance and repair of the building. Additionally, paragraph 16

authorized the landlord to take possession of the premises in the event of

certain defaults.

      Dr. Richard Mauer was the president of Mauer and a member of

I4NI at the time the lease was executed in 2003. He signed the lease for

both entities. 1

      On June 15, 2006, I4NI transferred its interest in the lease to Alta

Vista Properties, LLC. The parties agree that Alta Vista became Mauer’s

landlord    following     the    sale    and     assumed       all   the       rights   and

responsibilities of the landlord under the lease.              It is also undisputed

that prior to the 2006 sale, I4NI had access to the premises to show it to

prospective buyers, including Alta Vista.

      In May 2012, Alta Vista became interested itself in selling the

underlying real estate. Its representatives contacted representatives of

Mauer, who refused to allow Alta Vista access to the building to show it

to potential purchasers.        On June 27, Alta Vista filed a petition for a

declaratory judgment, seeking a ruling that it could have reasonable

      1Another   individual also signed on behalf of I4NI as vice president.
                                      5

access to the property to show it to prospective buyers. Mauer answered,

disputing Alta Vista’s interpretation of the lease.

      The parties both moved for summary judgment. Mauer relied on

paragraph 12 of the lease.     It said that this provision unambiguously

limited the landlord’s access to the premises for purposes of showing it to

potential buyers to the last ninety days of the lease term. Alta Vista, by

contrast, argued that the lease taken as a whole—especially paragraphs

13, 18, 19, and 27—gave it a reasonable right of access to show the

premises to prospective buyers throughout the lease term.

      The district court found the contract to be unambiguous and

granted summary judgment to Mauer. The court reasoned,

             In interpreting paragraph No. 12, the court finds no
      ambiguity to exist. . . . Paragraph 12(b) provides that the
      “tenant will permit prospective tenants or buyers to enter
      and examine the premises.” The time period allowed to
      permit entry relates back to the term “last 90 days of this
      lease.” Paragraph 12 provides a specific and determinative
      time, place, and setting that allows prospective buyers to
      view the property.

             The court further views paragraph 18 as not
      ambiguous in nature. The portion of paragraph 18 cited by
      the plaintiff, “The nonexclusive use of the leased premises for
      the term of this lease” is not ambiguous.            The term
      “nonexclusive use” may well be describing the effect of
      paragraph 12. The right of the landlord to show the property
      within the final 90 days of the lease term easily fits within a
      logical definition of “nonexclusive use.”

      The court added,

            The court does find the terms of the lease allowing the
      tenant the opportunity to prevent a landlord from allowing a
      [prospective] purchaser the opportunity to inspect the
      property to be rather onerous. However, the mere fact that a
      term to a commercial business lease is onerous does not
      make it ambiguous or unenforceable. It appears to the court
      that a standard lease term such as paragraph 12 entitled
      “signs” was inserted into this business lease that included
      an extremely lengthy lease term. In any event, sophisticated
      business entities such as Alta Vista may contract away any
                                      6
      right or responsibility. . . . The court concludes that Mauer
      may exclude Alta Vista Properties . . . from showing the
      property until 90 days remain in the term of the lease.

      Alta Vista appealed the ruling.      We transferred the case to the

court of appeals.

      The court of appeals affirmed the district court’s grant of summary

judgment in Mauer’s favor.      It agreed with the district court that the

lease unambiguously limits the landlord’s access to the property to show

it to potential buyers to the last ninety days of the lease term.

      We granted Alta Vista’s application for further review.

      II. Standard of Review.

      We review grants of summary judgment for correction of errors at

law. Peak v. Adams, 799 N.W.2d 535, 542 (Iowa 2011). “Interpretation

of a contract is a legal issue unless the interpretation of the contract

depends on extrinsic evidence.”     Pillsbury Co. v. Wells Dairy, Inc., 752
N.W.2d 430, 435 (Iowa 2008); see also Hartig Drug Co. v. Hartig, 602
N.W.2d 794, 797 (Iowa 1999) (“[W]hen no relevant extrinsic evidence

exists, the resolution of any ambiguity in a written contract is a matter of

law for the court.”).

      III. Analysis.
      This case requires us to determine whether the lease permits the

lessor to enter the property at reasonable times to show it to prospective

purchasers during the lease term. Mauer argues that because paragraph

12 provides that “Tenant will permit, [during the last 90 days of the lease

term], prospective tenants or buyers to enter and examine the premises,”

it thereby denies access at other times.         Alta Vista counters that

paragraph 18 provides Mauer with only “non-exclusive use” of the

premises, and paragraphs 13, 19, and 27 expressly give Alta Vista the

rights to sell the property, mortgage the property, or assign the lease
                                             7

interest at any time—thus carrying along the right to show the property

to such potential buyers or financiers. 2

       Because a lease is a contract, we apply ordinary contract principles

to determine its meaning and legal effect.                See Walsh v. Nelson, 622
N.W.2d 499, 503 (Iowa 2001). We thus consider the lease as a whole as

well as any pertinent extrinsic evidence. See Fausel v. JRJ Enters., Inc.,

603 N.W.2d 612, 618 (Iowa 1999); Fashion Fabrics of Iowa, Inc. v. Retail

Investors Corp., 266 N.W.2d 22, 26 (Iowa 1978).

       “[A]ny determination of meaning or ambiguity should only be
       made in the light of relevant evidence of the situation and
       relations of the parties, the subject matter of the transaction,
       preliminary negotiations and statements made therein,
       usages of trade, and the course of dealing between the
       parties. But after the transaction has been shown in all its
       length and breadth, the words of an integrated agreement
       remain the most important evidence of intention.”

Pillsbury, 752 N.W.2d at 436 (quoting Fausel, 603 N.W.2d at 618)

(internal quotation marks omitted).

       In this case, there is relatively little extrinsic evidence. We agree

with Mauer that a conclusory sworn statement from a principal of I4NI
as to what was “understood” or “wanted” at the time the lease was signed

brings little to the table. See Peak, 799 N.W.2d at 544 (declining to give

weight to one party’s undisclosed unilateral intent); cf. Kroblin v. RDR

       2Mauer   argues that Alta Vista did not preserve error on its contention that the
lease terms by implication give Alta Vista a right of access to show the property at
reasonable times to prospective purchasers. We disagree. In its petition, Alta Vista
alleged that the “[l]ease infers a reasonable right of access to Alta Vista and/or Alta
Vista’s agents to show Property to prospective buyer(s), in light of the explicit right given
for Alta Vista to sell Property and assign Lease to such grantee.” Additionally, in its
cross-motion for summary judgment, Alta Vista again urged,
               The explicit terms of the Lease, as well [as] what is necessarily
       implied from the terms of the Lease, show that I4NI and Mauer intended
       at the time the Lease was executed that the landlord be permitted access
       to the premises to show prospective buyers and mortgagees.
                                         8

Motels,   Inc.,   347 N.W.2d 430,    432–33       (Iowa   1984)    (authorizing

consideration of written and oral communications between the parties as

an aid to contract interpretation).          However, the fact that Mauer

permitted I4NI to show the property to potential buyers before the 2006

sale to Alta Vista is some evidence of a relevant course of dealing. See

Restatement (Second) of Contracts § 202(5), at 86–87 (1981) (referring to

the parties’ course of dealing as one interpretive tool). In any event, our

primary focus will be on the language of the lease.

      Several principles of interpretation are pertinent here.                 “[A]n

interpretation which gives a reasonable, lawful, and effective meaning to

all terms is preferred to an interpretation which leaves a part

unreasonable, unlawful, or of no effect.” Fashion Fabrics, 266 N.W.2d at

26 (citing Restatement (Second) of Contracts § 229 (Tentative Draft No.

1–7)). Additionally, a lease includes not only what is expressly stated by

its terms but also what is necessarily implied to give effect to its express

terms. See id. at 27 (“Contractual obligations may arise from implication

as well as from the express writing of the parties.”).                 Courts imply

contractual terms where the obligation “arise[s] from the language used

or [is] indispensable to give effect to the intent of the parties.” Id.

      Applying these principles here, we respectfully disagree with the

district court’s and the court of appeals’ interpretation of the lease. In

our view, paragraph 12 does not unambiguously bar the landlord’s

access to the premises to show the property to potential buyers prior to

the last ninety days of the lease term.          True, it says the tenant must

allow prospective tenants and buyers to enter and examine the premises

during the last ninety days. Yet it does not say this is the only time they

are permitted on the premises. Of course, we have the rule of contract

interpretation    that    “expressio     unius   est    exclusio   alterius—‘[T]he
                                     9

expression of one thing of a class implies the exclusion of others not

expressed.’ ” Peak, 799 N.W.2d at 548 (quoting Maytag Co. v. Alward,

253 Iowa 455, 460, 112 N.W.2d 654, 656 (1962)). But this is only one

principle of interpretation, not necessarily a legal trump card.

      Paragraph 12, as its heading indicates, deals primarily with the

subject of “signs.” Several clauses in subparagraph A of that paragraph

address the tenant’s right to put signs on the premises. Subparagraph B

then confers on the landlord the right to put “For Rent” or “For Sale”

signs on the premises during the last ninety days of the lease term, while

requiring the tenant to permit prospective buyers or tenants to enter and

examine the premises during that time. In context, one could conclude

that subparagraph B is intended to address the landlord’s need to find a

new occupant for the premises, either a lessee or a buyer, as the lease

nears expiration.    At the same time, one could conclude that the

subparagraph is not intended to restrict the landlord’s ability to sell,

finance, or refinance the property subject to the lease.

      Moreover, paragraph 12 does not refer to the landlord’s ability to

enter the building (conceivably with a prospective buyer in tow), but only

to prospective tenants and buyers (potentially unaccompanied by the

landlord) being able to enter and examine the premises. Once signs are

displayed as permitted by paragraph 12, prospective tenants and buyers

might see them and want to approach the tenant to look at the property,

even when the landlord or its representative is unavailable. Seemingly,

paragraph 12 requires the tenant to admit them and thereby serves a

significant purpose even if the landlord retains the right to show the

property outside the ninety-day window.

      The view that paragraph 12 is a relatively narrow provision dealing

with marketing the property to new occupants during the final ninety
                                          10

days, as opposed to a broad ban on landlord access to show the

underlying real estate to prospective buyers during the rest of the lease

term, finds support in other lease provisions. Paragraph 18 states that

Mauer’s use of the premises during the lease term is “non-exclusive.”

While there are various ways of reconciling this provision with the rest of

the lease, paragraph 18 undermines any presumption that Alta Vista can

only enter the property when a paragraph of the lease expressly permits

it to do so.       Such a restriction on Alta Vista’s access would result in

exclusive use for Mauer rather than the non-exclusive use described in

paragraph 18. 3

       Moreover, as Alta Vista points out, paragraphs 19 and 27 give it

the express right to sell and mortgage the underlying property (subject to

the lease) during the lease term. Who would buy or finance something

he or she could not look at?           See Fashion Fabrics, 266 N.W.2d at 26

(disfavoring lease interpretations that render a provision of “no effect”).

       In addition, Mauer’s interpretation seemingly leads to an unfair

outcome. See id. at 26 (disfavoring interpretations that leave a part of

the lease “unreasonable”). The inconvenience to Mauer if Alta Vista is

allowed to show the property at a reasonable time to a prospective buyer

is minimal.        Yet the potential loss to Alta Vista if it cannot show the

property is substantial: Alta Vista would likely be unable to sell the

property to or finance the property with any bona fide third party. See

Midwest Mgmt. Corp. v. Stephens, 291 N.W.2d 896, 913 (Iowa 1980) (“An

       3Notably, the district court’s interpretation of the “non-exclusive use” provision
would make it redundant of paragraph 12, thereby violating the rule against
interpreting contract provisions to have no independent effect. See Fashion Fabrics,
266 N.W.2d at 26.
                                          11

agreement will not be given an interpretation which places one party at

the mercy of another unless the contract clearly requires that result.”).

       In effect, Mauer’s interpretation of the lease operates as a restraint

on alienation.     See Restatement (Second) of Prop.: Landlord & Tenant

§ 15.1 & cmt. a, at 85–86 (1977) (noting “the undesirability of restraints

on alienation” and indicating that a landlord’s interest in the leased

property is “freely transferable, unless[] (1) a tenancy at will is involved;

(2) the lease requires significant personal services from either party and a

transfer . . . would substantially impair the other party’s chances of

obtaining those services; or (3) the parties . . . agree otherwise”). 4

       In sum, as we read the lease, the parties expressly contracted to

limit the more intrusive aspects of advertising and resale to the last

ninety days of the term, but the lease also allows Alta Vista to exhibit the

building to prospective buyers of the underlying real estate at reasonable

times outside that period. A sign advertising the property for sale could

adversely affect Mauer’s business.           Thus, paragraph 12 confines such

signs to the final ninety days. But temporary, reasonable access to show

the property to a potential buyer would not affect Mauer’s business and

is a logical corollary to paragraphs 13, 19, and 27 of the lease.

       It is true that the lease has a brief integration clause in paragraph

24. That clause states, “This Lease contains the whole agreement of the

parties.”     Such clauses are “one factor we take into account in

       4Mauer   further argues that paragraphs 5 and 16, authorizing Alta Vista to gain
“possession” of the premises on the happening of certain events, impliedly foreclose Alta
Vista from having access to the premises on other occasions. However, these provisions
grant Alta Vista exclusive possession. We are talking here about something different—
temporary access.       Mauer also invokes paragraph 7 concerning the duty of
maintenance and repair, but again the issue here is a distinct one not related to
maintenance or repair of the premises.
                                     12

determining whether an agreement is fully integrated.” C & J Vantage

Leasing Co. v. Wolfe, 795 N.W.2d 65, 85 (Iowa 2011). However, even if

we assume the lease here is fully integrated, the present dispute is one of

lease interpretation.   See 5 Margaret N. Kniffin, Corbin on Contracts

§ 24.12, at 108 (Joseph M. Perillo, ed., rev. ed. 1998) (“[I]f the court seeks

merely to interpret a contract term, which is to discern the meaning of a

term already contained in the contract, the question of whether the

parties intended their agreement to be integrated is not relevant.”). The

issue, in other words, is how we should reconcile and give proper effect

to arguably conflicting terms that (1) provide the tenant with “non-

exclusive use” of the premises for the entire lease term, (2) require the

tenant to allow access to prospective tenants and buyers during the last

ninety days, and (3) authorize the landlord to sell or mortgage the

premises or assign its lease interest at any time during the lease term.

      Reading an existing contractual provision as having an essential

corollary is different from adding a new implied term to a contract. The

former is an interpretive exercise and is permissible even if the

agreement is integrated. “An integrated contract can contain an implicit,

unstated, but necessary term . . . .”     Acoustic Processing Tech., Inc. v.

KDH Elec. Sys. Inc., 697 F. Supp. 2d 146, 161 (D. Me. 2010).             “The

salutary purpose of [an integration clause] is to preclude consideration of

matters extrinsic to the agreement. It is of no relevance if the promise,

albeit imperfectly expressed, is implicit in the contract as written.” Havel

v. Kelsey–Hayes Co., 445 N.Y.S.2d 333, 336 (App. Div. 1981); see also

U.S. Gypsum Co. v. Schiavo Bros., Inc., 668 F.2d 172, 175 (3d Cir. 1981)

(concluding that the presence of an integration clause did not negate any

implied covenants contained in the lease agreement); Dorset Indus., Inc.

v. Unified Grocers, Inc., 893 F. Supp. 2d 395, 407 (E.D.N.Y. 2012) (“While
                                           13

independent obligations beyond those stated in the contract will not be

inferred, a plaintiff adequately states an implied covenant claim by

alleging conduct that subverts the contract’s purpose without violating

its express terms.” (Internal quotation marks omitted.)); Seashore

Performing Arts Ctr., Inc. v. Town of Old Orchard Beach, 676 A.2d 482,

484 (Me. 1996) (“Even an integrated contract, such as the purchase and

sale agreement [here], may include an unwritten implied term.”). 5

       This principle is related to the implied duty of good faith and fair

dealing, which inheres in all contracts and cannot be disclaimed through

an integration clause or otherwise. See Fogel v. Trs. of Iowa Coll., 446
N.W.2d 451, 456 (Iowa 1989) (noting that the duty is “recognized in all

contracts”); Restatement (Second) of Contracts § 205, at 99 (1981)

(“Every contract imposes upon each party a duty of good faith and fair

        5We said in Fashion Fabrics that “an implied covenant cannot be found when the

contract is fully integrated.” 266 N.W.2d at 28. We later quoted this statement in East
Broadway Corp. v. Taco Bell Corp., 542 N.W.2d 816, 819 (Iowa 1996). We believe that
as a categorical statement, this language may be too broad and inconsistent with the
overall approach taken by the Second Restatement of Contracts. When a contract is
integrated, terms may not be added to the contract, whether express or through a
process of implication. See Restatement (Second) of Contracts § 212, at 125 (1981).
However, even when a contract is integrated, its express terms may carry necessary
implications, e.g., things that must be implied so a party does not lose the negotiated
benefit of the express term. And even when a contract is integrated, a court may have
to sort through and reconcile express terms that are seemingly inconsistent in order to
determine the parties’ ultimate rights. Those are matters of interpretation that form the
present dispute.
        In Fashion Fabrics, the sublessee’s case for an implied covenant was weaker.
The lease called for the sublessor to receive the greater of a flat rent or a percentage of
the sublessee’s gross sales. 266 N.W.2d at 24. The sublessee sought to imply a
covenant by the sublessor to continue operating its adjacent business. Id. at 26. In
that situation, one could not say that the sublessor’s staying in business was necessary
to give meaning to a provision in the sublease. The sublessee could operate its own
business and make sales regardless. Hence, although we ultimately implied the
covenant requested by the sublessee, we reasoned it made a difference whether the
contract was integrated or not. Id. at 28–29. Here, the implied right to show the
property is necessary to give effect to an express term authorizing sale. Additionally, in
Fashion Fabrics there were no seemingly inconsistent provisions to reconcile.
                                     14

dealing in its performance and its enforcement.”); see also Nw., Inc. v.

Ginsberg, 572 U.S. __, __ & n.2 134 S. Ct. 1422, 1432 & n.2, 188 L. Ed.
2d 538, 550 & n.2 (2014) (identifying ten jurisdictions that preclude a

party from waiving the obligations of good faith and fair dealing). “ ‘The

underlying principle is that there is an implied covenant that neither

party will do anything which will have the effect of destroying or injuring

the right of the other party to receive the fruits of the contract.’ ” Am.

Tower, L.P. v. Local TV Iowa, L.L.C., 809 N.W.2d 546, 550 (Iowa Ct. App.

2011) (quoting 13 Richard A. Lord, Williston on Contracts § 38.15, at 437

(4th ed. 2000)).

      The   Second    Restatement     of   Contracts   provides   a   helpful

illustration: If A, the owner of a shopping center, were to lease part of the

premises to B with the exclusive right to conduct a supermarket, it would

be a breach of the implied duty of good faith and fair dealing for A to

acquire the adjoining land and lease it to C to run a competing

supermarket. Restatement (Second) of Contracts § 205, illus. 2, at 101.

Although leasing the adjoining land to C would not literally violate the

express terms of A’s lease with B, it would nevertheless constitute a

breach of contract by implication for violating the obligation of good faith

and fair dealing. See id. The point is: The express right to operate the

only shopping center on the premises carries with it the implied right not

to have the landlord go into competition next door.

      The implied covenant of good faith and fair dealing, however, “does

not give rise to new substantive terms that do not otherwise exist in the

contract.” Bagelmann v. First Nat’l Bank, 823 N.W.2d 18, 34 (Iowa 2012)

(internal quotation marks omitted).        For example, in Bagelmann, we

declined to find a breach of the implied good-faith-and-fair-dealing

obligation when the mortgagee did not promptly provide the mortgagors
                                     15

with updated and more accurate flood zone information determinations.

Id. at 22.   The mortgage contained no promise the mortgagee would

provide notification or otherwise guarantee the property’s flood hazard

status and so we determined “any allegation of bad faith here lacks a

contract term to which it can be attached.” Id. at 34.

      The present case is analogous to the circumstances described

above in the Second Restatement of Contracts, and is distinguishable

from Bagelmann. As in the Restatement example, the implied right in

the present case follows logically from certain express terms of the

agreement—i.e., the landlord’s right to sell or mortgage the property.

And unlike in Bagelmann, the contract here contains an express term

(the right to sell) to which the implied obligation (the right to show the

property) can be attached. It would “destroy[] or injur[e] the right of [Alta

Vista] to receive the fruits of the contract” if we were to decline to find an

implied right to show the premises to prospective buyers.           See Am.

Tower, 809 N.W.2d at 550.

      Other courts have agreed that the right to sell property implicitly

includes the right to show it to prospective purchasers.           See, e.g.,

Magliocco v. Olson, 762 P.2d 681, 685 (Colo. App. 1987) (holding the

landlord did not trespass when his agent entered the premises for the

purpose of showing them to a potential tenant); Glenn v. Keyes, 154 P.2d
642, 644 (Utah 1944) (stating a landlord has the right to show the

premises to prospective buyers unless the landlord              and tenant

specifically agree to limit that right).   In a case from the District of

Columbia, a law gave the landlord the express right to sell the property.

Nat’l Metro. Bank of Wash. v. Judge, 37 A.2d 446, 446–47 (D.C. 1944).

The act did not explicitly grant a right to show the premises to
                                     16

prospective buyers, but the court nevertheless held the landlord should

be able to do so:

            We think it is beyond dispute that the tenant’s refusal
      to permit inspection seriously hampers sale of the
      property. . . . No argument is necessary to show that the
      great majority of prospective purchasers of improved real
      estate will not buy unless they are afforded a thorough
      inspection of the premises. . . .

              ....

             Our conclusion is that since the landlord has the right
      to sell and, because sale without inspection is impracticable
      and perhaps impossible, the right to sell includes the right to
      show the premises at reasonable times.

Id. at 447.

      More recently, a California court framed a similar issue in terms of

the balancing of tenants’ and landlords’ conflicting interests in rented

property. See Dromy v. Lukovsky, 161 Cal. Rptr. 3d 665, 669 (Ct. App.

2013). It first recognized the importance of the tenant’s right to quiet

enjoyment, but went on to explain that a landlord attempting to sell its

property also enjoyed a right worthy of protection:

      [L]andlords have a strong interest in being able to sell their
      property if they choose to do so. The law generally favors
      free alienability of property. A landlord’s ability to sell his or
      her property may be negatively impacted if the landlord
      cannot exhibit the property to prospective buyers at
      reasonable times.

Id. at 669–70 (citations omitted).

      The Uniform Residential Landlord and Tenant Act (URLTA),

adopted in Iowa, also acknowledges the importance of the landlord’s

ability to show property that he or she has the right to sell or finance.

See Iowa Code § 562A.19(1) (2011). It provides, “The tenant shall not

unreasonably withhold consent to the landlord to enter into the dwelling

unit in order to . . . exhibit the dwelling unit to prospective or actual
                                     17

purchasers, mortgagees, [or] tenants . . . .” Id. Although the URLTA only

governs residential leases, its underlying logic is no less applicable in a

commercial context: Where a landlord has the right to sell the premises,

he or she needs to be able to enter the property to show it to prospective

purchasers. Without a clearer directive in the lease to the contrary, we

should not read a commercial lease as denying this access to a landlord

who already possesses the underlying right to sell or mortgage the

property.

      In addition, courts have recognized a landlord’s right to show

property to prospective tenants as well as prospective buyers. See, e.g.,

Eight W. Thirtieth St. Corp. v. Zelart Drug Co., 107 N.Y.S.2d 324, 324

(Sup. Ct. 1951) (permitting a landlord to exhibit commercial property

where a statute gave the landlord the right to seek a prospective tenant).

      The Illinois Appellate Court held that a landlord had the

reasonable right to show the premises to prospective tenants upon

receiving notice that the current tenant was terminating his tenancy.

Gronek v. Neuman, 201 N.E.2d 617, 618 (Ill. App. Ct. 1964). Because the

lease apparently did not grant the landlord the right to re-let or sell the

property at any time as does the lease here, the Gronek court limited the

landlord’s right to show the property to the period after the tenant gave

notice of his intent to vacate. See id. The court concluded the right to

exhibit the property to potential tenants during this time was implicit in

the right to re-let the premises. See id. As the court put it,

      We feel that the month’s notice the law requires would be a
      meaningless protection, in terms of the lessor, if it did not
      carry with it the right to reasonably exhibit the premises
      durin[g] that period. Were this not the case, the landlord
      would suffer a month’s loss in rental since no one would rent
      the property without the right to first examine the premises.

Id. The same principle applies in the present case.
                                          18

       For the foregoing reasons, we hold the lease gives Alta Vista the

right to access the premises temporarily at reasonable times to show the

property to prospective buyers. 6              Because we have reached this

conclusion without considering extrinsic evidence and the only available

extrinsic evidence further supports Alta Vista’s interpretation, we can

interpret the lease as a matter of law even though it is ambiguous. See

Pillsbury Co., 752 N.W.2d at 435 (holding interpretation is a matter of law

for the court when it does not depend on extrinsic evidence); Restatement

(Second) of Contracts § 212, at 125 (indicating interpretation of an

integrated agreement is a question of law unless it “depends on the

credibility of extrinsic evidence or on a choice among reasonable

inferences to be drawn from extrinsic evidence”). Accordingly, we reverse

the district court’s judgment and remand the case with instructions to

grant summary judgment in favor of Alta Vista. The decision of the court

of appeals is vacated.

       6We   emphasize that access must be on reasonable terms so as not to interfere
with Mauer’s rights of possession. The D.C. Municipal Court of Appeals recognized this
principle when it stated, “The right of the landlord to show the premises must, of
course, be exercised reasonably and in good faith and cannot be used to harass the
tenant or unreasonably interfere with his enjoyment of possession.” Nat’l Metro. Bank
of Wash., 37 A.2d at 447. The Gronek court stated that the landlord showing the
property to prospective tenants did not breach the tenant’s right to enjoy the property
when it was done at the tenant’s convenience. 201 N.E.2d at 618. Iowa’s URLTA
requires the landlord to give “at least twenty-four hours’ notice . . . and enter only at
reasonable times.” Iowa Code § 562A.19(3).
        We agree that Alta Vista’s right to show the property to prospective purchasers
should be exercised reasonably and with minimal interference with Mauer’s rights of
possession and enjoyment of the property. In particular, because Mauer is a health
care provider, the parties should work together to ensure that any showing of the
property complies with the privacy provisions of the Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”). Pub. L. No. 104-191, 110 Stat. 1936 (1996)
(codified as amended in scattered sections of 42 U.S.C.).
                                    19

      IV. Conclusion.

      For the foregoing reasons, we reverse the summary judgment

entered in favor of defendant Mauer Vision Center, PC and remand for

the district court to enter summary judgment in favor of plaintiff Alta

Vista Properties, LLC.

      DECISION OF COURT OF APPEALS VACATED; DISTRICT

COURT    JUDGMENT        REVERSED        AND   CASE   REMANDED    WITH

INSTRUCTIONS.

      All justices concur, except Appel, J., who takes no part.