Court Opinion

ID: 9640452
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:06:23.556989+00
Date Added: 2024-06-11T18:10:29.917897
License: Public Domain

KILGARLIN, Justice,
concurring.
I concur in the court’s opinion, but write to express my agreement with Brown’s alternative contention that this court should, as a matter of public policy, create an implied condition which obligates landlords to make reasonable efforts to mitigate their damages following a tenant’s default.
I acknowledge there is pronounced disagreement among the states regarding this issue. Some jurisdictions require landlords to mitigate their damages; others do not. See Annot., 21 A.L.R.3d 534 (1968). This difference of opinion springs from the dual nature of a lease as both a contract and a conveyance of an interest in land.
*205The traditional view emphasizes the property law aspect of a lease and imposes no obligation on the landlord to minimize damages. Under this theory, the landlord is not obligated to take any action, but may let the property remain vacant, following the tenant’s abandonment, and recover rent periodically during the remainder of the term. This view comports with the law of property and its presumption that the tenant is the owner of the property during the term of the lease. No duty arises because the landlord need not concern himself with the tenant’s abandonment of his own property. See, e.g., Gruman v. Investors Diversified Services, 247 Minn. 502, 78 N.W. 2d 377 (1956).
A contrary view emphasizes the contractual nature of the lease and incorporates the principle of mitigation of damages which is generally applicable to contract actions. This theory recognizes that modem leases, unlike their feudal antecedents, are primarily compacts of mutual covenants in which the landlord and tenant incur continuing obligations during the term of the lease. This view observes that a landlord’s duties no longer end with the execution of the lease and relinquishment of the property and that the property aspects of the transaction are now subservient to the mutual promises made by landlord and tenant. This theory further recognizes a public policy element that requires property be put to beneficial use. See Wright v. Baumann, 239 Or. 410, 398 P.2d 119 (1965).
The courts of this state have adhered to the traditional rule of imposing no duty to mitigate. Early v. Isaacson, 31 S.W.2d 515, 517 (Tex.Civ.App.—Amarillo 1930, writ ref’d); Metroplex Glass Center, Inc. v. Vantage Properties, Inc., 646 S.W.2d 263, 265 (Tex.App.—Dallas 1983, writ ref’d n.r.e.); Racke v. Anheuser-Busch Brewing Assoc., 17 Tex.Civ.App. 167, 42 S.W. 774, 775 (Galveston 1897, no writ).
An exception to the traditional rule, however, has been recognized when a landlord pursues a remedy in contract. In Employment Advisors, Inc. v. Sparks, 364 S.W.2d 478 (Tex.Civ.App.—Waco), writ ref'd n.r.e. per curiam, 368 S.W.2d 199 (Tex.1963), the landlord sued the tenant, who had abandoned the premises, for future rentals under a contract theory premised on anticipatory repudiation of the lease. In commenting on the measure of damages for the anticipatory breach of a lease, the court of appeals noted that such damages were “subject, of course, to the usual rules concerning mitigation.” Id. at 480. We expressed no opinion on this matter in the per curiam opinion. Had we done so, we would have explained that the remedy sought by the landlord was exclusively in contract and incompatible with the traditional view grounded in the law of property; hence, the contractual principle of mitigation was applicable. See Hicks, The Contractual Nature of Real Property Leases, 24 Baylor L.Rev. 441, 521 (1972).
Although the rights of landlord and tenant under Texas law were once firmly rooted in the law of property, this court has gradually come to the realization that contract principles are equally important. We have previously noted that at common law the lease developed in the field of real property law, but that blind adherence to the law of property to determine the duties and obligations of the parties ignored the contemporary realities of the landlord/tenant relationship. Increasingly, we have replaced antiquated property law concepts with more equitable and contemporary solutions in contract. Davidow v. Inwood North Professional Group—Phase I, 747 S.W.2d 373 (Tex.1988); Kamarath v. Bennett, 568 S.W.2d 658 (Tex.1978); Humber v. Morton, 426 S.W.2d 554 (Tex.1968).
Brown, the tenant in our present case, forcefully argues that the time has come for this court to abandon the traditional view that a landlord has no duty to mitigate its damages. Brown submits that it is more sensible to impose the rule of contract which requires an injured party to exercise reasonable care to minimize its damages. Walker v. Salt Flat Water Co., 128 Tex. 140, 96 S.W.2d 231, 232 (1936). I agree. Likewise, so do the following authorities: Dushoff v. Phoenix Co., 22 Ariz. App. 445, 528 P.2d 637, 640 (1974); Schneiker v. Gordon, 732 P.2d 603, 610-*206611 (Colo.1987) (en banc); Olsen v. Country Club Sports, Inc., 110 Idaho 789, 718 P.2d 1227, 1232-33, 1233 n. 3 (App.1985); Sigsbee v. Swathwood, 419 N.E.2d 789, 799 (Ind.App.1981); Rauch v. Circle Theatre, 176 Ind.App. 130, 374 N.E.2d 546, 550 n. 1 (1978); Hirsch v. Merchants National Bank & Trust Co., 166 Ind.App. 497, 336 N.E.2d 833, 836 (1975); Vawter v. McKissick, 159 N.W.2d 538, 541 (Iowa 1968); Benson v. Iowa Bake-Rite Co., 207 Iowa 410, 221 N.W. 464, 467 (1928); Lawson v. Callaway, 131 Kan. 789, 293 P. 503, 504 (1930); Wichita Properties v. Lanterman, 6 Kan.App.2d 656, 633 P.2d 1154, 1157-58 (1981); Jefferson Development Co. v. Heritage Cleaners, 109 Mich.App. 606, 311 N.W.2d 426, 428 (1981); Bernstein v. Seglin, 184 Neb. 673, 171 N.W.2d 247, 250 (1969); Carisi v. Wax, 192 N.J.Super. 536, 471 A.2d 439, 442-43 (1983); Paragon Industries, Inc. v. Williams, 122 Misc.2d 628, 473 N.Y.S.2d 92, 93, (1983); Weinstein v. Griffin, 241 N.C. 161, 84 S.E.2d 549, 552 (1954); Isbey v. Crews, 55 N.C.App. 47, 284 S.E.2d 534, 537 (1981); Ruud v. Larson, 392 N.W.2d 62, 63 (N.D.1986); Stern v. Taft, 49 Ohio App.2d 405, 361 N.E.2d 279, 281 (1976); United States National Bank v. Homeland, Inc., 291 Or. 374, 631 P.2d 761, 765 (1981); United States Rubber Co. v. White Tire Co., 231 S.C. 84, 97 S.E.2d 403, 409 (1956); Martin v. Siegley, 123 Wash. 683, 212 P. 1057, 1058-59 (1923); St. Regis Apartment Corp. v. Sweitzer, 32 Wis.2d 426, 145 N.W.2d 711, 715 (1966).
The traditional rule that a landlord has no duty to attempt to mitigate is an anachronism that is counterproductive to sound public policy. An injured party, regardless of his relationship to real properly, should not be permitted to exacerbate his damages. It has been observed that a covenant to pay rent in a typical contemporary lease is essentially no different than a promise to pay contained in any other contract. Schneiker v. Gordon, 732 P.2d 603, 610 (Colo.1987) (en banc). It is simply good public policy “to discourage even persons against whom wrongs have been committed from passively suffering economic loss which could be averted by reasonable efforts.” Wright v. Baumann, 398 P.2d at 121, quoting C. McCormick, Handbook on the Law of Damages, § 33 at 127 (1935). Continued adherence to the traditional rule contravenes this sound public policy in that it encourages economic and physical waste. Most recently the Supreme Court of Colorado has recognized this and joined the modem trend away from the traditional rule of no duty to mitigate, writing:
Under traditional property law principles a landlord could allow the property to remain unoccupied while still holding the abandoning tenant liable for rent. This encourages both economic and physical waste. In no other context of which we are aware is an injured party permitted to sit by idly and suffer avoidable economic loss and thereafter to visit the full economic consequences upon the party whose breach initiated the chain of events causing the loss.... We believe that the contract principle of ‘avoidable consequences’ or ‘duty to mitigate’ should be applied in this context to prevent a landlord from passively suffering preventable economic loss, to encourage the productive use of land, and to decrease the likelihood of physical damage to property. Likewise, a landlord should be permitted to maintain an action for contract damages caused by a tenant’s wrongful abandonment so that the landlord is able to receive the benefit of his bargain.
Schneiker v. Gordon, 732 P.2d at 610-11.
I would add Texas to the list of enlightened states which have abandoned the antiquated rale of property law in favor of more contemporary contract principles. I would hold the landlord to a duty to make reasonable efforts to mitigate his damages and would not permit the landlord to recover avoidable damages, i.e., the increased damages caused by his failure to mitigate.
SPEARS, GONZALEZ and MAUZY, JJ., join in this concurring opinion.