Court Opinion

ID: 9601856
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:50:18.855972+00
Date Added: 2024-06-11T15:01:38.108132
License: Public Domain

*666Rees, J.,
dissenting.
Lanterman appeals from the summary judgment ruling which held that because of his failure to pay rent he is liable for breach of his December 27, 1977, contract with plaintiff’s assignor. The essence of his argument to the trial court and to us is that impossibility of performance excuses his nonpayment of rent. It is said that performance of the contract was rendered impossible because the contract required his use and occupancy of the premises to be exclusively for the purpose of operating a liquor store and he was denied a retail liquor license by a decision of the state Alcohol and Beverage Control Board made after the contract was signed.
From White Lakes Shopping Center, Inc., v. Jefferson Standard Life Ins. Co., 208 Kan. 121, 124, 490 P.2d 609 (1971); State Highway Construction Contract Cases, 161 Kan. 7, 66-68, 166 P.2d 728 (1946); Berline v. Waldschmidt, 159 Kan. 585, 588-591, 156 P.2d 865 (1945), we glean the relevant impossibility of performance rules. Where performance of an act provided by a contracting party is or becomes impossible for any person at any time, that is, the act is or becomes impossible in itself, it is said there is objective impossibility of performance. Where there is objective impossibility of performance, performance by the promisor is excused unless the impossibility was foreseeable and might have been provided against in the contract. Where performance of an act promised by a contracting party is or becomes impossible for the promisor, but not for some other person or at some other time, that is, the act is not, or does not become, impossible in itself, it is said there was subjective impossibility of performance. Where there is subjective impossibility of performance, performance by the promisor is not excused unless provided against in the contract.
Lanterman’s challenge of the summary judgment order cannot stand. The act of use and occupancy of the premises for the exclusive purpose of operating a liquor store was not and did not become an act impossible in itself; someone could have done it; the question of foreseeability is of no moment. Lanterman’s personal inability to operate a liquor store was, at best, a matter of subjective impossibility of performance not guarded against in the contract. The summary judgment order was not erroneously entered.
*667As I understand the facts, the contract requirements for payment of rent were that on May 24, 1978, and on the 24th day of each of the following eleven months $1,050 was to be paid as and for rent for the preceding month; and that on May 24, 1979, and on the 24th day of each of the following eleven months $1,108.33 was to be paid as and for rent for the preceding month. Rent attributable to the period June 24, 1979, through June 30, 1979, was $258.62. Thus, for the period from April 24, 1978, when Lanterman took possession, to July 1, 1979, when ABC Rentals’ lease commenced, the total rent obligation was $15,075.28. On June 22, 1978, when his first monthly rental payment was some 29 days delinquent, Lanterman made his first and only payment, $1,050. Consequently, his liability exposure to plaintiff for unpaid rent was $14,025.28.
The trial judge found that as of about June 1, 1978, there arose on the part of the plaintiff the duty to make a reasonable effort to mitigate its damages and that the plaintiff failed to fulfill this duty until January, 1979. Without attempting to account for specific dates, a task the majority and I find impossible under the evidence, it appears the damages judgment of $6,300 was intended to represent the rent not paid in the months of January through June, 1979. If so, and if the trial judge chose to not compensate plaintiff for the seven day “tail” at the end of June, 1979, the award should have included an additional $116.66, for a total award of $6,416.66. However, plaintiff makes no complaint in this regard. Instead it argues it was entitled to recover for all 1978 rent payments called for by the contract and not paid. The argument made is that no duty to mitigate arose until about October 1 and that from and after that time it fulfilled that duty.
The majority agrees with plaintiff and holds that as a matter of law it was about October 1 that the duty to mitigate arose. The majority finds evidence supporting the trial finding of fact that it was not until about January 1 that plaintiff made reasonable efforts to mitigate. They then hold plaintiff should recover the dollar amount it claims for unpaid rent after excluding the $3,150 that was to be paid in October, November and December. Since the amount sought by plaintiff for unpaid rent was $12,916.95, not $14,025.28, the majority concludes plaintiff is entitled to $9,766.95.
*668I agree with the majority that the finding of the trial judge that it was not until January that there were reasonable efforts by the plaintiff to mitigate is a finding of fact supported by sufficient evidence. Where I part company with the majority is at their conclusion that as a matter of law it was only for the rent payments due after October 1 that plaintiff’s entitlement to damages required reasonable effort to mitigate the loss. Whether there was a reasonable effort to mitigate is a question of fact. I am of the view that similarly whether at a given time reasonable effort to mitigate is required of a person so as to entitle him to damages is a question of fact. The resolution of a question of fact by the fact finder must be sustained on appeal if there is supporting evidence. It is patent that the fact finder, the trial judge, was aware of the applicable mitigation of damages law and that he applied it as he found proper under the circumstances.
I cannot accept the majority’s apparent position that the trial court finding of the period of time when plaintiff made reasonable efforts to mitigate its damages is a finding of fact to be approved on appeal if there is supporting evidence but that the trial judge’s finding of when plaintiff needed to make reasonable efforts to mitigate its damages should be reversed as a matter of law. In the journal entry of judgment is the finding that the “[plaintiff’s] duty to mitigate commenced when [it] learned a liquor license had been denied.” This was about June 1, 1978. At that time, some five months had passed since the contract was made, Lanterman informed plaintiff he had been denied a retail liquor license but that he would try to find someone to operate the liquor store for him, and he was in arrears on his rent. As I see it, the majority holds that the evidence establishing these facts was insufficient to support the trial judge’s finding and that as a matter of law in this case abandonment by the tenant, Lanterman, was necessary to require reasonable effort by plaintiff to mitigate. I detect in the majority opinion excess concern with, or emphasis on, the matter of abandonment and I am concerned with the treatment of the doctrine of avoidable consequences as a matter of duty.
At 22 Am. Jur. 2d, Damages § 33, pp. 55-57, it is said:
“The general doctrine of avoidable consequences applies to the measure of damages in actions for breach of contract. Thus, the damages awarded to the nondefaulting party to a contract will be determined and measured as though that party had made reasonable efforts to avoid the losses resulting from the default. *669Some courts have stated this doctrine in terms of a duty owing by the innocent party to the one in default; that is, that the person who is seeking damages for breach of contract has a duty to minimize those damages. However, on analysis, it is clear that in contract cases as well as generally, there is no duty to minimize damages, because no one has a right of action against the nondefaulting party if he does not reasonably avoid certain consequences arising from the default. Such a failure does not make the nondefaulting party liable to suit; it only indicates that the damages actually suffered are greater than the law will compensate. Therefore, in contract actions, the doctrine of avoidable consequences is only a statement about how damages will be measured.
“The innocent party is not required to take extraordinary efforts to avoid the losses from the breach of contract nor is he expected to incur risks or spend substantial sums of money to protect the defaulters Nor need he sacrifice a substantial right of his own in order to minimize his loss. All that is required of the nondefaulting party — in measuring his damages — is that he act reasonably so as not unduly to enhance the damages caused by the breach. If the court determines that he has not acted reasonably to avoid damages, the actual award of damages for the breach will be reduced by the amount which could have been reasonably avoided. On the other hand, if the court decides that the nondefaulting party has made reasonable efforts to minimize defendant’s damages, the award will not be limited by the doctrine of avoidable consequences. Since the primary question is one of the reasonableness of the action of the nondefaulting party, each case must necessarily turn on its own facts.” (Emphasis added.)
In Creten v. Chicago, Rock Island & Pac. Rld. Co., 184 Kan. 387, 402, 337 P.2d 1003 (1959), the statement in the opinion that the plaintiff there was under a duty to exercise reasonable care and diligence under the circumstances to mitigate his damages is preceded by:
“It is a general rule of law that one who is injured by the wrongful or negligent acts of another is bound to exercise reasonable care and diligence under the circumstances to avoid loss or to minimize the resulting damages and to the extent that his damages are the result of the failure to exercise such care and diligence, he cannot recover [citations omitted].” (Emphasis added.)
The doctrine of avoidable consequences and its treatment in opinions is cogently addressed in Theis v. duPont, Glore Forgan Inc., 212 Kan. 301, 307-308, 510 P.2d 1212 (1973), where it is said:
“Our cases have frequently stated that one who is damaged by breach of contract is under a duty to minimize or mitigate his damages where he can do so by the exercise of reasonable diligence. See, e.g., Swisher v. Beckett, 172 Kan. 711, 242 P.2d 831; Cain v. Grosshans & Petersen, Inc., 196 Kan. 497, 413 P.2d 98; In re Estate of Stannard, 179 Kan. 394, 295 P.2d 610. The use of the term ‘duty’ is criticized by the text writers. See 5 Corbin on Contracts, § 1039; 11 Williston on Contracts, § 1353. The rule, more properly stated, is simply that damages are not recoverable for harm that the plaintiff should have foreseen and could have *670avoided by reasonable effort without undue risk, expense or humiliation. Restatement, Contracts, § 336. Comment d to the Restatement section explains why the term ‘duty’ should not be employed:
“ ‘It is not infrequently said that it is the “duty” of the injured party to mitigate damages so far as that can be done by reasonable effort on his part. Since his legal position is in no way affected by his failure to make this effort, however, it is not desirable to say that he is under a “duty.” His remedy will be exactly the same, whether he makes the effort and avoids harm or not. But if he fails to make the reasonable effort with the result that his harm is greater than it would otherwise have been, he cannot get judgment for the amount of this avoidable and unnecessary increase. The law does not penalize this inaction; it merely does nothing to compensate him for the harm that a reasonable man in his place would have avoided.’ (p. 537)
“The use of the term duty has also been criticized occasionally in our own cases without lasting impact. See Rock v. Vandine, 106 Kan. 588, 189 Pac. 157; Griffin v. Oklahoma Natural Gas Corp., 132 Kan. 843, 847, 297 Pac. 662, 81 A.L.R. 274. A party rests under a disability to claim damages which he might have prevented.”
In Osborn v. Grego, 226 Kan. 212, 217, 596 P.2d 1233 (1979), the doctrine is stated again:
“Damages are not recoverable for harm that a party should have foreseen and could have avoided by reasonable effort without undue risk, expense or humiliation. Theis v. duPont, Glore Forgan Inc., 212 Kan. 301, Syl. ¶ 8.”
Despite the foregoing, we find in Kansas decisions:
“It is a long-standing rule in this state that where a tenant, under contract to pay rent on real property, abandons the property and notifies the landlord of that abandonment, it is the duty of the landlord to make a reasonable effort to secure a new tenant for the property and obtain rent therefrom before he can recover rent from the old tenant under the contract. Where a party seeks redress for the wrong of another, the law requires that he shall do whatever he reasonably can and improve all reasonable opportunities to avoid the consequences and to lessen the injury.” (Emphasis added.) Gordon, Executor v. Consolidated Sun Ray, Inc., 195 Kan. 341, 344-345, 404 P.2d 949 (1956).
“The duty to mitigate damages is not an unlimited one; an injured party is bound only to exert reasonable efforts to avoid damage; his duty is limited by the rules of common sense.” (Emphasis added.) Steele v. J. I. Case Co., 197 Kan. 554, 565, 419 P.2d 902 (1966).
“It is a general rule of law that one injured by reason of a breach of contract by another is under a duty to exercise reasonable care to avoid loss or to mitigate and minimize the resulting damage. Such reasonable care does not require a party to execute a new or different contract.” (Emphasis added.) Iseman v. Kansas Gas & Electric Co., 222 Kan. 644, Syl. ¶ 1, 567 P.2d 856 (1977).
“An injured party has a duty to mitigate damages. However, that duty does not require the party to take unreasonable risks, incur unreasonable inconvenience or expense, or disorganize his business.” (Emphasis added.) Barbara Oil Co. v. Patrick Petroleum Co., 1 Kan. App. 2d 437, Syl. ¶ 5, 566 P.2d 389, rev. denied 222 Kan. 749 (1977).
*671To repeat, the doctrine of avoidable consequences, or the mitigation of damages rule, neither gives rise to nor bars a cause of action. As stated in Theis, the rule simply is that damages are not recoverable for harm the plaintiff should have foreseen and could have avoided by reasonable effort without undue risk, expense or humiliation. Whether harm was foreseeable and avoidable has to be a fact question.
It may be correct to say that where a tenant, under contract to pay rent on real property, abandons the property and notifies the landlord of that abandonment, damages for unpaid rent accruing thereafter are not recoverable in the absence of reasonable efforts on the part of the landlord to lessen his injury. It is a different thing to say the landlord need attempt to lessen his injury only when there is abandonment. I am not prepared to say that when the fact finder is aware of the doctrine and the evidence supports his or their decision, an appellate court, relying on the fact the evidence was undisputed, may decide as a matter of law when harm was foreseeable and avoidable, or as in this case, to decide as a matter of law that harm was not foreseeable and avoidable until a certain time. It is my conclusion that the trial judge, having seen the witnesses and having heard the testimony, having obviously taken the doctrine or rule into consideration, and having before him evidence that in June, 1978, Lanterman was in arrears on his rent payments and had neither obtained a retail liquor license nor arranged for some licensee to run the business in the five months since the contract was made, cannot be found as a matter of law to have erred in denying recovery for 1978 rent due but unpaid. I would sustain the trial court judgment for unpaid rent.
I would affirm the trial court denial of recovery for taxes, common area charges and damage to the premises, but not for the reason given by the trial judge.