Court Opinion

ID: 5165108
Source: CourtListenerOpinion
Date Created: 2022-01-02 03:26:08.100632+00
Date Added: 2024-06-11T08:25:49.315220
License: Public Domain

Judge NEY
specially concurring in part and dissenting in part.
I agree with the majority that the judgment entered cannot stand. However, I write separately because I believe that the proper reasons for reversal should be other than those upon which the majority bases its result.
Further, I would remand for an entry of judgment for plaintiff rather than for a new trial.
I.
I do not agree that the subordination clause of tenant’s lease automatically extinguished all of tenant’s rights when Silverado foreclosed the property in 1987. Rather, I believe that the terms of the lease terminate the tenant’s rights only at the option of the landlord.
Here, the undisputed facts demonstrate that, after foreclosure, Silverado, the succeeding federal banking authorities, and landlord all treated the lease as in full effect until its stated expiration date. There was no demonstrated reliance upon the foreclosure as basis for termination of tenant’s rights.
The reasoning adopted by the majority in part II of its opinion would, as a matter of law, automatically terminate a tenant’s rights and obligations after foreclosure. This I believe is contrary to the express terms of the lease which specifically provide:
This lease and all of the rights of Tenant hereunder, at Landlord’s option, shall be subject and subordinate to ... the lien of any mortgages.... (emphasis added)
Therefore, I would conclude that the plain language of the lease expressly permits landlord to hold tenant to its terms, and the record reveals that landlord did so. Furthermore, it is particularly inequitable to permit landlord to rely upon the terms of the lease and obligations thus imposed upon tenant until, because of changed market conditions, it wishes to terminate the lease. Cf. White v. Short, 794 P.2d 1110 (Colo.App.1990).
Consequently, under the situation here in which landlord held tenant to the lease, I would conclude that landlord did not exercise its option to subordinate the lease to the lien created by the mortgage.
II.
Because I conclude that the lease continued in effect until its termination in 1989, it is necessary to consider tenant’s claim that, by his actions, he became entitled to an extension of his tenancy beyond the 1989 termination.
In order to extend the lease beyond 1989, the evidence must show expenditures by tenant for specific purposes, i.e., investment or rides, and for definite amounts, i.e., $10,000 for each year’s extension. In addition, these expenditures must have been approved by owners or management.
In evaluating the sufficiency of the evidence which supports a jury verdict, an appellate court must view it in the light most favorable to the prevailing party, here the tenant, and also must give to that party the benefit of all reasonable inferences therefrom. Furnary v. Merritt, 837 P.2d 192 (Colo.App.1991).
Evidence offered by tenant consists of a recapitulation of claimed expenditures during the period 1979-1987 based upon a depreciation schedule prepared by tenant’s accountant in 1988. Supporting documents for the depreciation schedule consisted of tax returns and some receipts and cancelled checks. This document showing the recapitulation, along with a letter from tenant expressing his opinion that the lease had thereby been extended, was sent to the manager of the square in 1988. The manager at that time forwarded the information to Silverado. Silverado never responded to this request for approval of the expenditures made during the previous nine-year period. Further, tenant relies upon the physical presence of the *116enumerated amusement rides and improvements at the lease site to prove his compliance.
Viewing this evidence in the light most favorable to tenant, I would accept his claim to have made the required monetary investments, and, thus, would next consider whether these investments were made with the requisite approval of owners or management.
Evidence in support of this necessary component to qualify for the extensions sought consists of testimony by tenant that owners and managers were aware of his actions and did not protest, disapprove, or prevent them. In addition, the manager of the property from 1986 to 1987, stated that she remembered certain improvements or additions made by tenant; that to the best of her knowledge, the actions “would have been approved”; and that tenant would not have been able to make the improvements he did without approval.
In contrast, the owner of Virginians testified that he had never accepted the lease, was never asked to grant approval of any improvements or rides established by tenant, and considered tenant’s expenditures to be limited to ordinary upkeep or construction and improvement of portable buildings. The manager at the time of Virginians’ ownership likewise stated that he did not receive requests for approval from tenant for expenditures. The tenant does not dispute that he never requested specific approvals for specific expenditures until 1988, more than one year after the last claimed expenditure was made.
When the property passed to K.A.M., there were at least two managers, the first of whom stated that he did not receive any application from tenant for permission to install a ride. The second manager, who managed the property from 1985 to 1987, continued the testimony cited previously by stating that she did not make any agreements with tenants and “did not even see leases of tenants.” She further stated: “As far as improvements on things that [tenant] did do ... I’m sure that that went through ownership.” [Question] “Not through you?” [Answer] “No.”
The owner of K.A.M. testified that he would have been consulted with respect to any major extension, that he would have had to approve any such extension, and that any such extension “would have gone through attorneys, and it would have been a fully documented procedure.” This owner further stated that while the property manager possibly could have verbally approved certain actions, any such action which extended or modified the lease would “definitely” have been documented and recorded. It was K.A.M.’s position that money expended by tenant during its ownership was not for investment but was for “getting up to normal standards of both visual and safety.”
Evidence was also offered by a representative of Silverado concerning the property after Silverado’s acquisition in 1987. He testified that tenant had never furnished to Sil-verado figures showing expenditures for proposed new rides or improvements, that tenant had never requested a lease extension, and that tenant had never discussed with Silverado what type expenditure would qualify for a lease extension.
In summary, tenant seeks recognition that he expended over $150,000 on “investment and rides” during the period 1979-1989 which he believed was with approval of management or owners. However, even if it were to be assumed, arguendo, that the implied approval upon which tenant relies was actually given, such would be insufficient to comport with the terms of the lease. There is no evidence in the record which references approval to any definite amounts of expenditure related to specific extension of the lease.
Therefore, even when viewed in the light most favorable to tenant, there is no competent evidence to support his claim for extension of the lease based upon approved expenditures. And, when a jury’s verdict is clearly erroneous in light of the law and facts, that verdict cannot stand. Riñe v. Isham, 152 Colo. 411, 382 P.2d 535 (1963).
Thus, I conclude that, even if tenant is correct in his assertion that the unsigned lease with addendum was fully in effect, he has, since the completion of the second five-year option period, been a month-to-month *117tenant. As such, his tenancy is subject to termination upon proper notice by landlord.
I would therefore remand this cause for entry of judgment for landlord and to vacate the order for attorney fees.